Crown Prosecution Service v Benye [2007] EWHC 772 (Admin)

[2007] EWHC 772 (Admin)Case No CJA/89//2006
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 4 th April 2007
Before
MR JUSTICE WALKER
Between
CROWN PROSECUTION SERVICEClaimantANTHONY CHUKWADI BENYEDefendantSTELLA BENYEInterested Party
(Transcript of the Handed Down Judgment ofWordWave International LtdA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7421 4040 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr Jonathan Hall (instructed by the Crown Prosecution Service) for ClaimantMs Ita Marshall (instructed by Mountain Partnership Solicitors) for Interested PartyHearing Hearing dates:
Judgment
[1]This application by the Crown Prosecution Service (“CPS”) concerns a leasehold interest (“the leasehold”) comprising a 125 year lease of a flat at 43 Valentine Court, Perry Vale, London SE23. For convenience I shall refer to this flat as “the Valentine Court flat”. The freehold of the Valentine Court flat was and is owned by the London Borough of Lewisham (“the council”). On 15 January 2004 the leasehold was conveyed by the council into the sole name of Stella Benye (“Mrs Benye”) under the “right to buy” scheme. Mrs Benye is an interested party in these proceedings. She describes herself as a part-time cleaner, businesswoman and housewife. It is said by the CPS that in truth the sole beneficial owner of the leasehold following that conveyance was the defendant in these proceedings, Anthony Chukwadi Benye (“Mr Benye”). The CPS applies against Mr and Mrs Benye for a declaration to that effect, and for a receivership order under Section 77(8) of the Criminal Justice Act 1988 [“the Act”].

Background

[2]Mrs Benye has explained, and the CPS has not disputed, that she and Mr Benye were married “according to the native law and custom” of Nigeria after the birth of their third child, and that they had a further three children, a total of six in all. The precise date on which Mrs Benye first came to the United Kingdom has not been identified in the evidence before me. As to what happened thereafter, Mrs Benye’s case, not accepted by the CPS, is that Mr Benye came to the United Kingdom in 1999, she discovered that he was being unfaithful, and as a result they separated in 2000 and were divorced in 2001. Mrs Benye has produced a copy of a certificate, apparently issued by the marriage registry of Ojo Local Government, Lagos State, dated 20 July 2001, to the effect that the marriage was dissolved “according to the valid judgment of divorce in Customary Court with suit NO. IG/029/CC/99.” Mrs Benye also asserted that by the time arrangements were being made for the purchase of the leasehold, Mr Benye was staying with his new partner, a woman called Rita.[3]Mr Benye was arrested in the United Kingdom on 2 February 2004. On 25 June 2004 Mr Benye pleaded guilty to conspiracy to defraud. He was sentenced on 23 July 2004 to 3 years 6 months imprisonment. The fraud involved duping victims into parting with sums of money, often large sums, on the false pretext that they would receive even larger sums of money in return.[4]Confiscation proceedings were initiated. Agreement was eventually reached between the CPS and Mr Benye that Mr Benye had benefited from the frauds in the amount of £989,813.75. Agreement was also reached that Mr Benye’s realisable assets amounted to £141,751.26. These agreements were reached on the second day of a confiscation hearing before H.H.J. Hardy sitting at Southwark Crown Court. Following that agreement the court made an order dated 24 May 2005 for confiscation in the amount of £141,751.26, to be paid by 31 December 2005, with 2 years imprisonment in default of payment. As part of this process, Mr Benye signed a formal agreement dated 24.5.05 stating, among other things, that the leasehold was his property, with a net equity of £119,000.[5]A compensation order was sought for a victim of the fraud in the sum of £119,220.97. It was accepted that Mr Benye did not have sufficient assets to meet both a confiscation order and a compensation order, and so it was ordered by H.H.J. Hardy that the payment of the compensation order should be met from the sums recovered from the confiscation order.[6]Mr Benye had not always agreed with the proposition that he was the owner of the leasehold. In reply to a prosecutor’s statement asserting that position, Mr Benye on 17 February 2005 lodged a defence statement which included the following:
“The defendant married Stella Benye in Nigeria in 1982. By then they had already had three children together. They separated in 2000 and were divorced in Nigeria on 20th July 2001. In all they had six children, the youngest of whom still live with Mrs. Benye at 43 Valentine Court, Perry Vale, Forest Hill, London SE23 2LH. She purchased a 125-year lease upon those premises from the London Borough of Lewisham at a 60% discount under the right to buy scheme for £52,500 in November 2003. The defendant had not been a tenant of the local authority as Mrs. Benye had been. Until the marriage broke down he had merely stayed there as a guest on his business trips to the UK. All the correspondence concerning the prospective sale was between Mrs. Benye and the council or between the solicitors acting on her behalf (Hartnells) and those with whom solicitors are obliged to engage on such occasions. Following a revised mortgage offer from the Alliance and Leicester they wrote to Mrs. Benye on 15th August 2003 pointing out that all occupants over 17 had to sign a consent deed. It was plainly their understanding that the only person to whom that would apply was the daughter (see Exhibit SB/7). Since the divorce he had married another lady called Rita and when in the UK stayed with her in Peckham at the flat she rented from the council in Vivian Close. Mrs Benye raised most of the deposit for the purchase of 43 Valentine Court from the sale of property in the Delta area of Nigeria that she had inherited from her father: see deed of conveyance between her and Mr Clement Okuwibie dated 21st November 2002. The sale price of 5,400,000 Naira is the equivalent of between £23,000 and £24,500. This was the source of the deposits of £6,000 on 11th April 2003 and of £12,000 on 15th April 2003 into her Lloyds TSB Select Account No. 00349021 held at the Lewis GR Lewisham Branch: see Exhibit SB/12. The combined sum was transferred on 2nd June 2003 into her Flexible Savings Account No. 07209748 held at the same branch: see Exhibit SB/12. She also used some of the profits from her own business which consisted of buying and selling foodstuffs, shoes and clothing. There came a time when Hartnells asked to be put in funds. Due to an unfortunate misunderstanding Mrs Benye believed that the solicitors required payment not only of their costs but also of the deposit for the lease on the flat: hence she applied for two bankers drafts to be issued in favour of Hartnells, one in the sum of £26,250 and the other for £940.75: see (Exhibits SB/9, SB/10A and SB/11B). The drafts were both drawn on her Flexible Savings Account. The payment of their costs was retained by the solicitors, but after a while they returned the deposit money (together with some interest), which went back into Mrs. Benye’s Flexible Savings Account on 17th September 2003. There it remained until 18th November 2003, when £27,000 came out of her account and was paid into the defendant’s Lloyds TSB Select Account No. 00833101 (see Appendix J). The reason for that was that on the date that the deposit money was actually required Mrs Benye had difficulty getting access to the money in her account and when their son Frank told the defendant about it he decided to make a temporary loan of the sum that was required so that the transaction could go through on time. This is reflected in the entry dated 10th November 2003 in Appendix B (concerning the defendant’s High Interest Cheque Account Plus No. 60750824 at the Knightsbridge branch of Barclays Bank), which shows that on that date the defendant ordered and collected a bankers draft for a sum just a little under £27,000 made out in favour of Hartnells. From the above dates it is apparent that she repaid the loan just over a week later. The defendant had absolutely no financial interest in 43 Valentine Court.”
[7]After completing the period that he was required to serve in prison, Mr Benye has disappeared, leaving the bulk of the confiscation order unpaid.

Course of events at the hearing

[8]The hearing of the present application took place on 2 February 2007. Mr Jonathan Hall appeared for the CPS. Ms Ita Marshall appeared for Mrs Benye. Mr Benye did not attend and was not represented. The documentary material placed before the court for the present hearing was in large part material which had been prepared for the confiscation hearing. This included a prosecutor’s statement dated 18 March 2005 prepared by Mr Alan Fairfax, a financial investigator in the confiscation unit of the Metropolitan Police, and a defence reply dated 17 February 2005. This reply appears to have been prepared in response to an earlier version of the prosecutor’s statement at a stage when the CPS contended, as is now accepted wrongly, that the Proceeds of Crime Act 2002 applied. Appendix A to the prosecutors’ statement contained a copy of the indictment. Appendix B contained two spreadsheets. The first recorded 42 transactions between 6 August 1996 and 5 July 2004 on Mrs Benye’s Select Account with Lloyds TSB, account number 00349021 (“the Select Account”). The second spreadsheet recorded 142 transactions between 11 May 1998 and 16 July 2004 on Mrs Benye’s Flexible Savings Account with Lloyds TSB , account number 10209748 (“the Savings Account”). Appendixes C to O contained spreadsheets recording transactions between Mr Benye and various financial institutions.[9]A statement dated 10 January 2007 made by Mr Fairfax in the present proceedings drew attention, among other things, to the fact that the alleged sale documents described the land in question as located in “Okpou New Town”, and the purchaser as an employee of the “Anioma Local Government”. Mr Fairfax had asked appropriate authorities in Nigeria to investigate this alleged sale, and he produced copies of correspondence resulting from that request. I describe that correspondence in more detail later in this judgment when dealing with Mr Fairfax’s oral evidence.[10]In accordance with an agreement between counsel at the hearing before me the first witness was Mrs Benye. At the conclusion of Mrs Benye’s evidence, Ms Marshall closed Mrs Benye’s case, and Mr Fairfax gave evidence for the CPS. This concluded the oral evidence. It was agreed that each side could rely upon documentary material placed before me, subject to submissions as to weight. It was not possible to complete oral closing submissions in the time available, and accordingly I gave directions for written submissions.

The case for the CPS

[11]Mr Hall accepted that Mrs Benye was not bound by what Mr Benye agreed on 24 May 2005. He anticipated three submissions by Mrs Benye in support of contentions that the leasehold was in her name because it was entirely her property, or alternatively that it was at least hers to some extent: a) That she paid the deposit on the purchase of the leasehold in the amount of £26,969.36; b) That her “right to buy” discount of £38,000 should be treated as a contribution to the purchase price in any event; c) That the mortgage advance of £26,250 which was utilised for the purchase of the leasehold was a mortgage taken out in her sole name in order to fund the balance of the purchase price.[12]Mr Hall invited the court to conclude that the use of Mrs Benye’s name in the purchase was a sham, a cover for Mr Benye, in a transaction which was in truth Mr Benye’s transaction. Her tenancy provided him with the opportunity to buy the property advantageously, with a view to obtaining an asset which was his own. Mrs Benye had allowed herself to be used by her husband for the transfer of his assets – the monies “mistakenly” transferred to Hartnells during the period 22 July to 17 September 2003, the deposits to her account, and the purchase of the property.[13]In this regard, Mr Hall advanced detailed arguments which can be reduced to 6 propositions: i) Mrs Benye accepted that the funds used for the deposit on the leasehold (£26,969.36) in fact came from Mr Benye’s High Interest Account, No. 60750824. Her statement that this was no more than a loan from Mr Benye to her which she repaid was based on the implausible suggestion that she had not been able to gain access to her account at the relevant time. ii) Her explanation for transferring approximately £27,000 to Hartnells between July and September 2003 was implausible and not supported by documentation from Hartnells. iii) Her explanation as to how she had money available to her from a property transaction in Nigeria was a demonstrable lie. On the balance of probability, Mr Benye was the source of the large deposits into Mrs Benye’s account. In this regard Mr Hall added, “the fact that the property was conveyed into Mrs Benye’s sole name, and that the mortgage was taken out in her sole name, proves nothing.” iv) Mrs Benye’s account of her relationship with Mr Benye was not made out. She produced documents evidencing the dissolution of her marriage to Mr Benye in 2001. However, the CPS relied on two points: a) She signed a tenancy agreement on the Valentine Court flat in 2002; b) Mr Benye “was shown on the electoral register at that address.” v) Mrs Benye had chosen to give this court “a rehash of the version of events proffered to the Crown Court” by Mr Benye. However, in 2005 she had co-operated closely with Mr Benye in his submission on confiscation (providing a statement, and her own bank statements). Secondly, not withstanding this, Mr Benye had eventually admitted that the leasehold was solely his, and third, the CPS had made clear its case since 2005 and Mrs Benye had had every opportunity to improve her case. vi) The court was entitled to infer that there must have been a discussion between Mr Benye and Mrs Benye as to ownership (even if this is denied and no positive evidence is produced). Mr Benye accepted that the leasehold was solely his at the confiscation hearing, from which the true position may be inferred.

Mrs Benye’s written evidence

[14]A written statement for the confiscation hearing was provided by Mrs Benye. A further written statement dated 22 November 2006 was signed by Mrs Benye for the purposes of the present application. Additional documents were lodged for the present hearing. These included copies of documents dealing with certain aspects of Mrs Benye’s immigration status, and others containing information said to show the existence of the Anioma people in Nigeria and to be relevant to the sale in Nigeria of property inherited from her father. In both her statements Mrs Benye gave an account which was broadly consistent with that in the defence statement of 17 February 2005, quoted above. Her statements gave further information on a number of aspects. I shall deal with them to the extent necessary when I describe Mrs Benye’s oral evidence.

Mrs Benye’s oral evidence

[15]Mrs Benye gave oral evidence which was confused on a number of matters, and vague on others. At the outset of her evidence she made contradictory statements about the order in which her children were born. She claimed to be unable to remember her children’s birthdays.[16]She stated firmly, however, in examination in chief that she was born in Nigeria in Anabra State, and was regarded as being “of the Anioma” people. Okpou, she said, was a small village in Illah in Delta State. She said that she was divorced in 2001 and that while she was in the United Kingdom Mr Benye never lived with her. He had never stayed with her, he only came to see the children. He never stayed at the flat. As to the suggestion that Mr Benye’s name was on the electoral register current in March 2005 as a resident of the Valentine Court flat, she said that she did not know how that had happened, perhaps the children had done it.[17]Mrs Benye concluded her evidence in chief by saying that at the confiscation hearing at Southwark Crown Court she was not involved in discussions. She had known nothing of what was going on. Before seeing documents setting out the agreements reached by Mr Benye, she had not been aware that he said he had the sole interest in the leasehold. He did not have that interest, it was her property, and what she had said about the provision of the deposit was correct.[18]In cross-examination it was suggested to Mrs Benye that she had no right to remain in the United Kingdom, and therefore no reason to sink money into a property. She replied, “I am entitled to stay here. I am a British Citizen. When I came here they gave me 5 years to remain.” She clarified this by saying she had not been given a document for citizenship of the United Kingdom. At one stage she had been detained by the immigration authorities, but they had now given her 5 years to remain in the country. She had been removed from the United Kingdom by the immigration authorises “in August 2003”. She thought she might have spent 10 days in Lagos. Then she came back to the United Kingdom.[19]Mrs Benye said her reason for coming back was that her children were here. Initially she said that Mr Benye had not provided for the children, and had not stayed with them, but she accepted that he had given money to them. She explained an earlier statement that “he was still supporting me…responsible for the children” by saying that it was intended to mean he was supporting her by giving money to the children. As to an earlier statement that Mr Benye had “moved out” of her flat, she replied that he had never lived with her at Valentine Court. He might have moved out of other properties. At the time of that earlier statement she was confused, and had been questioned “under duress”. She maintained that Mr Benye did not live with her at any property in the United Kingdom.[20]When shown an earlier statement of hers which recorded that Mr Benye stayed at her address, Mrs Benye said that when he visited the children he stayed with them. He had never lived in the house. He had never stayed the night.[21]Questioning then turned to the deposits of £6,000 and £12,000 on 11 April 2003 and 15 April 2003 into the Select Account. In this regard assertions had been made that sterling was not readily available in Nigeria. Whenever it proved possible, parts of the proceeds of sale were converted into pounds. Visitors from the UK would bring the money to Mrs Benye in cash as and when the opportunity arose. She would then aggregate the money into suitable amounts to be paid into the bank.[22]Under cross-examination Mrs Benye said that prior to the transfer of £6,000 on 11 April 2003 Lloyds TSB had given her a loan. She had borrowed £8,000. When asked about the £6,000 in cash paid into Lloyds on 11.4.03, Mrs Benye replied, “that should be my friend Jane Ofor. The money came from Nigeria. Somebody brought it in when she was coming. It was brought in pounds. The person who brought it in was my friend Tina Obi. She put in my account. Tina went to the Lewisham branch and paid it in.”[23]Mrs Benye then corrected this by saying that Tina gave it to Jane Ofor to put it into the account. She added that the £12,000 was brought in by Tina as well. Mrs Benye said that she (Mrs Benye) paid it into her account in notes on 15.04.03. Thus Tina had come twice from Nigeria to London, the first time bringing £6,000, the second £12,000.[24]Mrs Benye was asked why she did not pay the money directly into her Savings Account. She said she did not have an answer. It was put to her that the analysis of the Savings Account in appendix B contained no entries between 29 December 2003 and June 2004. The analysis the of Select Account in appendix B between June 2003 and 12 February 2004 showed no entries, there were payments in of cash in February and March 2004, but no payments out until 20 April 2004. Mrs Benye said that she had been using her current account, which I understood to mean the Select Account, to obtain money. In reply to a question from me as to what money she was living off, she replied that sometimes she brought and sold things. She maintained that she had paid the mortgage on the leasehold. She queried whether entries for the mortgage payments had been put into appendix B. She had not received money from Mr Benye in order to pay the mortgage.[25]When asked why the deposit paid to Hartnells on 10 November 2003 had not come from her account, Mrs Benye replied that at that stage she was held by the immigration authorities at Oakington Detention centre. Accordingly Mr Benye had made her a loan.[26]Mrs Benye was asked whether the primary purpose of buying the leasehold was for the children to have an investment in the United Kingdom. She replied that it was not. She was then shown a passage in her statement for the confiscation proceedings where she had said that this was the “primary objective”. She replied that this passage in her previous statement was wrong. She could not explain why she had said that then. She denied being willing to take money from Mr Benye and to dispose of it as he asked. It was suggested to her that it was because she had taken money from Mr Benye that she had arranged for the drafts to Hartnells in July 2003, four months in advance of completion, and that this was not (as she had asserted) a mistake. Her reply was that the only money she had taken from Mr Benye was the loan he had made by advancing the deposit in November 2003 when she was in detention. She said the leasehold was her house.[27]In re-examination Mrs Benye said she was not being used to launder money for Mr Benye. She then said that she had been held at the detention centre from 7 to 17 October 2003. This appeared to conflict with a form apparently emanating from Oakington Detention Centre, a copy of which had been included in the documents produced earlier by Mrs Benye. The form recorded that an asylum application had been made by her on 8 November 2003, and it showed a date of arrival at Oakington of 10 November 2003. Mrs Benye nevertheless maintained that she had been taken to Oakington on 7 October 2003. Returning to the cash payments into the Select Account of £6,000 of 11 April 2003 and £12,000 on 15 April 2003, Mrs Benye said these sums were not bought into this country together. Tina had brought the £6,000 from Nigeria on 11 April 2003. She spent two weeks in this country before leaving for Nigeria again. It was pointed out to her that the £12,000 had been paid in within that two weeks period. Nonetheless Mrs Benye maintained that the £12,000 brought by Tina the second time, and when pressed to identify when that time was Mrs Benye said that it was in June 2003.[28]At the conclusion of re-examination I observed that thus far nobody had made reference to any documents or records emanating from the mortgagee. Mr Hall then directed attention to a “revised offer” from Alliance and Leicester, dated 20 October 2003 and addressed to “Ms S. Benye”. What was offered was a loan of £26,250, with a rate of interest fixed at 3.89% until 31 July 2005. The repayment term was 10 years. Monthly payments of £290.14 were to cover both capital and interest. Mr Fairfax, the author of the prosecutors statement for the confiscation proceedings, had said at paragraph 4.3 of that statement:
“…It is said by the Crown that from the bank account of Mrs Benye in their possession it is not possible for her to purchase, maintain or meet mortgage payments from her legitimate income. Enquiry of the Alliance and Leicester Building Society with whom the mortgage is held confirm that the mortgage is being paid monthly by direct debit from the [Select Account]. From the purchase of the property to the last entry on the bank statement for that account in possession of the Crown showed no payments to the Alliance and Leicester Building Society.”
[29]Mrs Benye in response to this said that the direct debit had been in place from the start. She could think of no reason why the schedules prepared by the prosecutor showed no payments to Alliance and Leicester.

Oral Evidence of Mr Fairfax

[30]In evidence in chief Mr Fairfax confirmed the accuracy of the witness statement he had prepared for these proceedings on 10 January 2007. He added that the evidence he had prepared for the confiscation proceedings was true to the best of his knowledge and belief. Appendix B to the prosecutor’s statement had been complied from bank statements obtained under a production order. The aim of appendix B was to detail large payments in or out. He would have excluded interest payments and odd amounts. The aim was to deal with the leasehold. It had not been prepared in order to show Mrs Benye’s in coming and outgoings. Mr Fairfax was asked about the passage from paragraph 4.3 quoted earlier. He assumed that at that stage – in March 2005 – he was referring to the actual statements from Lloyds TSB that he had in his possession, which would have been up to June 2004. He believed that at a later stage he saw later statements showing payments to Alliance and Leicester. It was possible that in the prosecutor’s statement of March 2005 he had failed to record mortgage payments, but he thought that this was unlikely. He confirmed that a second statement he had made for the confiscation proceedings was true. Annexed to the second statement were extracts from an “internal memo” prepared by the Nigerian Economic and Financial Crime Commission and date 21 May 2005. Among other things, the Commission had been asked to comment on assertions made in the defence statement about the alleged sale of property in the Delta area of Nigeria, inherited by Mrs Benye from her father, and the “deed of conveyance” between Mrs Benye and Mr Okuwibie dated 21 November 2002. An extract from the Commission memo stated:
“That concerning the Deed of Assignment made in respect of the Land claimed to be at Illah Village in Delta, enquiries were made at Delta State Liaison Office where it was confirmed in writing that there is no Local Government Area known as Anioma LG.A in Delta State. They also confirmed that there is no place called OKPOU NEW TOWN in Illah Delta State. The constitution of the Federal Republic of Nigeria 1999 was equally checked and there is no Anioma LG.A found in the Delta State. Relevant part of the constitution is equally attached. The conclusion on this is that if the place the Land is said to be located does not exit, the “Deed of Assignment” is considered a false document.”
[31]The Economic and Financial Crime Commission had also provided a letter from the government of Delta State of Nigeria, dated 28 April 2005. This included the following:
“Please be informed that there are 25 Local Government Areas (L.G.A) in Delta State and none of them is called Anioma L.G.A. Find attached a comprehensive list of the L.G.As. Secondly, whereas there is a town called Illah in Oshimili North LGA, the place called Okpou New town is not known to this office.”
[32]A list of Local Government Areas in Delta State was attached to the letter of 28 April 2005 and examination of that list confirmed that it contains no mention of “Anioma” Local Government Area.[33]In cross-examination Mr Fairfax said that he had to relay on the information he had received from the Commission. He agreed that the solicitors who had prepared Mrs Benye’s statement for the confiscation proceedings were the same as those acting for Mr Benye in those proceedings.

Other Evidence Relied on by the Prosecutor

[34]Mr Hall explained that the other evidence relied upon by the prosecutor was found in the witness statement of Sarah-Sue Henderson prepared at the outset of these proceedings in July 2006. In the exhibits to the statement, Ms Henderson produced the “defence reply to prosecutor’s statement” prepared by Tank Jowett Solicitors on behalf of Mr Benye in the confiscation proceedings. Mr Hall relied on the fact that section 4 of this document showed close co-operation between the defendant and Mrs Benye and the Crown Court.[35]Mr Hall specifically relied upon the schedule of agreed realisable assets dated 25 May 2005 and signed by Counsel on behalf of both the prosecutor and Mr Benye. Paragraph 1 of the Schedule said that prosecution and defence agree that the value of the defendant’s realisable assets was less that the value of the benefit figure, and that the defendant’s assets were to be valued at £141,751.26. The assets were identified in value in a table, which included :
“100% of the equity in [the leasehold]. Valuation [as at October 2004] £145,000. Outstanding mortgage believed to be £26,000. Net equity £119,000.”
[36]The Schedule then continued as follows:
“The prosecution make it clear that the claim on the property 43 Valentine Court is based on two facts:- 1. The money transferred by Bankers Draft to Hartnell’s Solicitors in order to facilitate the purchase came from the defendant’s account number 60750824 on the 10th November 2003. All the credits to this account prior to this date are accepted by the defendant to be the proceeds of crime. 2. It is not accepted that the statement and the documents produced by Stella Benye are genuine. In particular the prosecution do not accept that this woman had access to untainted funds from the sale of a Nigerian property. The documents produced to support the written assertions made by Stella Benye are forgeries. The prosecution have evidence to support this assertion. IT SHOULD BE NOTED THAT THE COURT DID NOT HERE FROM STELLA BENYE IN PERSON.”
IT SHOULD BE NOTED THAT THE COURT DID NOT HERE FROM STELLA BENYE IN PERSON.”[37]Mr Hall explained that so far as the prosecution were aware Mr Benye had gone to Jamaica. There would be no enforcement proceedings against him while other avenues for recovery of the amount of the confiscation order remained open.

Submissions on behalf of Mrs Benye

[38]Ms Ita Marshall made submissions on behalf of Mrs Benye. Initially she addressed the contention that Mr Benye had been placed on the electoral register in respect of 43 Valentine Court in 1999. This, Ms Marshall observed, was inconsistent with the chronology, for Mrs Benye did not move to Valentine Court until March 2002. Mrs Benye’s case was that she knew nothing about Mr Benye being on the electoral registrar. She was the one who exercised the right to buy. By the time of the move to Valentine Court she and Mr Benye had separated.[39]There was aspects of Mrs Benye’s evidence which were confused. She had given dates in relation to her dealing with the immigration authorities which plainly conflicted with the document provided by the Oakington Detention Centre. There may also have been confusion on the part of Mrs Benye as to whether Mr Benye stayed the night when he was visiting the children. Nevertheless on behalf of Mrs Benye Ms Marshall maintained that Mr Benye had never been living at Valentine Court with Mrs Benye. He had no interest in the property, and had no part in the right to buy proceedings.[40]At this point there was a short adjournment so that Ms Marshall could consider with her instructing solicitor a fall back position if the court were to conclude that payments had been made by Mr Benye in relation to the leasehold as a way of investing the proceeds of his crimes. When the hearing resumed we had reached a late stage in the day. I gave directions for written submissions from the parties and the oral hearing accordingly concluded at this point.

Further Evidence from Mr Fairfax

[41]Prior to the lodging of written submissions on behalf of Mrs Benye a further statement was made by Mr Fairfax. He explained that the Schedules in Appendix B to the prosecutor’s statement, examined in evidence at the hearing on 2 February 2007, were not complete as they were compiled to show the benefit and assets of Mr Benye during the commission of his offences. After giving evidence, he had wished to check whether his recollection in relation to Mrs Benye’s mortgage payments had been correct. He had made the new statement because on checking the file containing bank statements for Mrs Benye he had noted that there were payments coming from the Select Account to the Alliance and Leicester. He produced copies of the bank statements for that account covering the period 20 June 2003 to 16 July 2004. He also produced bank statement for Mrs Benye’s Savings Account covering the period 27 June 2003 to 16 July 2004.

The written submissions

[42]Written submissions dated 12 February 2007 on behalf of Mrs Benye observed that the bank statements now provided by Mr Fairfax showed that Mrs Benye had been paying the mortgage regularly since its inception. The submissions dealt with four further matters. The first of these was the electoral register, where it was observed that the prosecutor had not produced any documentary evidence. The second concerned the financing of the deposit. Here the submission was that most people [in Nigeria] preferred to keep their money in their houses rather than in banks, and to transfer money to the UK by business people arranging transactions which enabled sterling to be handed over in the United Kingdom. The third matter concerned what had actually taken place in relation to the deposit in November 2003. It was observed that Mrs Benye had paid to Mr Benye the sum of £27,000 on 18 November 2003. There was only one possible reason for making such a payment: it was to compensate Mr Benye for having arranged the banker’s draft for £26,969,36, using his High Interest Plus Account, made payable to Hartnells on 10 November 2003. The bank statements of Mr Benye showed that the money had gone into his bank account, and this married with Mrs Benye’s account in her written statement. The written statement was to be preferred to the confused oral evidence given on 2 February 2007, which was inconsistent with the form produced by Oakington Detention Centre.[43]The fourth matter dealt with in the written submissions of 12 February 2007 concerned the position if the court were to conclude that funds were provided by Mr Benye otherwise than by way of loan in order to enable the purchase of the leasehold. Ms Marshall relied upon paragraphs 50 and 51 of the decision of the Court of Appeal in Mumford v Ashe (unreported, 18 October 2000 as establishing that there is no automatic rule ascribing the right to buy discount. Ms Marshall added that it is clear from cases like Springette v Defoe (1992) 2 FLR 388 that there are circumstances where the right to buy discount may be taken into consideration in determining the apportionment of an interest in property. It is necessary to look at the circumstances in order to reach a fair and just decision. Here, Mrs Benye was the only person entitled to exercise the right to buy provision, she alone obtained the mortgage and dealt with the conveyancing solicitors. There was no evidence that Mr Benye participated in acquisition of the property. The earlier payment of the deposit to the solicitors was a mistake. The use of funds from Mr Benye’s account for payment of the deposit in November arose only because she was unable to deal with her affairs and her elder sons assisted her in arranging a loan of the deposit from Mr Benye. His initial account in the confiscation proceedings was that the money was a loan. Had he been investing in the property then his name would have been on the tenancy and the conveyancing documents. It was submitted that the explanation for Mr Benye having absconded was that he knew very well that he had no interest in the leasehold, and he had reached agreement with the prosecutor in the confiscation proceedings solely to protect himself.[44]Mr Hall on behalf of the prosecutor lodged written submissions dated 15 February 2007. These submissions acknowledged at the outset that in two respects the cross-examination of Mrs Benye had proceeded on a false basis. First, the bank statements now produced by Mr Fairfax showed that it had been incorrect to suggest that Mrs Benye was not using the Select Account between June 2003 and February 2004. Second, an initial mortgage payment of £379.20 to the Alliance and Leicester Building Society had been made on 8 December 2003, and regular monthly payments of £290.14 were made thereafter. As to the regular monthly mortgage payments, the primary case for the prosecutor was that the bank statements also showed large cash deposits into Mrs Benye’s accounts. The court was invited to consider whether these mortgage payments were in fact made by or on behalf of Mr Benye as a way of investing the proceeds of his crime.[45]Alternatively, the prosecutor recognised that the court might conclude that Mr Benye had provided the deposit, while Mrs Benye had arranged the mortgage advance and had provided the benefit of her “right to buy”. On the basis that Mr Benye had provided at least some part of the means of acquiring the leasehold, the CPS submitted that in determining the respective beneficial interests, the Court must first consider the intention of the parties regarding beneficial ownership (Crossley v Crossley [2005] EWCA Civ 1581); failing that the Court has to consider the share to which Mrs Benye is entitled having regard to the whole course of dealing (Hiscock v Oxley (2004) EWCA Civ 546). An intention may be inferred in the absence of direct evidence, see Abbey National Bank PLC v Stringer.[46]In submitting that all or at least some of the leasehold represented in a investment by the defendant of the proceeds of his frauds, the CPS relied on what it described as Mrs Benye’s “admission” in her statement for the confiscation proceedings describing the purchase as “an investment”, and Mr Benye’s “unequivocal admission in the Crown Court that it was entirely his.” This admission was against interest – increased realizable assets meant an increased confiscation order. Even if Mr Benye intended at that time to leave the UK, there was no good reason for him to agree to an increased order (he may not have been able to leave; he may have needed to return, for example to visit his children, with the risk of being held accountable for the unpaid order).[47]It was said that Mrs Benye had no immigration status at this time. She was not in a position to invest in real property in the UK. Moreover, she had not earned the right to buy in her sole name. This contention was disputed on the grounds that Mr Benye had been living with Mrs Benye at a previous address in Lind Street, was shown on the electoral role at Valentine Court, and had, at the very least, stayed at Valentine Court on occasions. If Mr Benye had told Mrs Benye to sell the property shortly before his arrest on 2.2.04, it was incredibly unlikely that Mrs Benye would have done anything other than disburse the proceeds as directed by him, as she has done in the past.[48]The CPS next submitted that the court could be satisfied that Mrs Benye had no interest in the property. Even if payments towards the mortgage had, after Mr Benye was no longer on the scene, been made by Mrs Benye these could not alter the intention of the parties. In any event, Mrs Benye would have had to pay rent. This approach was supported by the judgment of the Court of Appeal in Mumford v Ashe: where it is possible to infer an agreement or arrangement as to beneficial ownership, it does not follow that a monetary value must be given to the ‘right to buy’ (as under a resulting trust). There is no absolute rule.[49]In a further written submission dated 18 February 2007, Mrs Benye explained a payment of £8,000 credited to her Select Account on 22 April 2004. This was an advance which had been made to her by Lloyds TSB Whitgift Centre Croydon branch, for which Mrs Benye produced relevant documentation. Monthly repayments of £145.03 were provided for in that documentation, and appeared in the bank statements. A response by the CPS submitted that this did not take the matter any further.

Analysis

[50]Mr Hall advances the six propositions identified earlier in order to show that Mr Benye did more than merely lend Mrs Benye relevant sums. I shall examine each of these six propositions, but in a different sequence from that advanced by Mr Hall.

Proposition 5: Mr Benye’s stance on confiscation

[51]I accept that the eventual agreement by Mr Benye that he owned a 100% interest in the leasehold in entitled to some weight. I do not find it possible to give it substantial weight, however. The admission emerged only at a stage when Mr Benye was attending court for the purposes of a confiscation hearing at which he might well have been ordered to pay a very much greater amount. The prosecutor, for sensible practical reasons, wished to secure an admission by Mr Benye that identifiable and realisable property was his. He is accepted by the prosecutor to have been a fraudster. There was a strong incentive for Mr Benye to agree to the admission in question if it meant that the prosecutor would abandon a potential claim for much larger sums. Mr Benye was on any view an unscrupulous individual. Against the possibility that he may have made the admission because he did indeed have a 100% interest in the leasehold, there is to be balanced the possibility that he made the admission because it would remove the risk of the court making a confiscation order for a much greater amount, leaving him with the options of paying the actual amount of the order from hidden assets or of finding some way in which he would be able to default without suffering the consequences.

Proposition 4: Relationship between Mr and Mrs Benye

[52]Proposition 4 disputed Mrs Benye’s account of her relationship with Mr Benye. Two initial points were relied on by Mr Hall. First, Mrs Benye signed a tenancy agreement on the Valentine Court flat in 2002. That fact on its own is not in my view of any particular assistance to the CPS. Mrs Benye had previously had a flat in her own name at Lind Street, where she was a tenant of the Council. I find it difficult to see anything sinister in the move to Valentine Court occurring when it did. The second point would have more substance if it were made good. This was that Mr Benye “was shown on the electoral register” at the address of the Valentine Court flat, and that this must have been the result of a declaration to the electoral authorities at some point after Mrs Beny had signed the tenancy agreement. As to that, Mr Fairfax’s recollection in oral evidence was hazy. No document has been produced evidencing the alleged entry on the electoral register. Mr Fairfax’s evidence as to other aspects of the matter has been proved to be mistaken. In those circumstances I am unable to make any finding that Mr .Benye was on the electoral register as a resident of the Valentine Court flat.[53]Written submissions from the CPS further relied on the fact that Mr Benye had been living with Mrs Benye at their previous address in Lind Street, and had, at the very least, stayed at Valentine Court on occasions. However the evidence was that the tenancy at Lind Street was in Mrs Benye’s sole name. Mr Benye may, after the divorce, have stayed on occasion at Lind Street and Valentine Court, but there was no evidence about these occasions such as could lead me to conclude that they were inconsistent with the relationship having come to an end.[54]The result is I accept Mrs Benye’s evidence that the relationship between her and Mr Benye was at an end following divorce in 2001.

Proposition 3: Lies as to source of cash deposits

[55]It is apparent that by 22.7.03 Mrs Benye had sufficient funds to pay the deposit on the leasehold. Accordingly it was important for the CPS to show that those funds came from Mr Benye. In cross-examination of Mrs Benye specific questions were asked about the two deposits in her Select Account of £6,000 on 11.4.03 and £12,000 on 15.4.03. Mrs Benye’s answers in cross-examination were confused and vague. In re-examination she suggested that in June 2003 her friend Tina had brought over the money which had been paid into the Select Account on 15.4.03. So confused was Mrs Benye’s evidence generally, however, that I would hesitate before relying on her confusion alone in order to conclude that Mr Benye had a part in the payments in question.[56]I am satisfied, however, that this is not simply a question of Mrs Benye being confused. I am willing to accept that Mrs Benye is, or regards herself as, a member of the Anioma people. However, Mrs Benye’s account of the source of these funds is in my view plainly untrue. She asserts that these two payments were part of the proceeds of sale of land in Nigeria. The information supplied by the Nigerian Economic and Financial Crime Commission, and by the Government of Delta Sate, makes it clear that the alleged sale is an invention. Both Mr Benye and Mrs Benye lied about this transaction in the statements that they made for the confiscation hearing. Mrs Benye has repeated those lies in the present proceedings. Why should this be so? I am driven to the conclusion that the reason is that the two sums of £6,000 and £12,000 were cash payments which emanated from Mr Benye. I make no findings as to other cash payments into Mrs Benye’s accounts. They were not put to her in cross-examination and she has had no opportunity to comment on them.[57]As to the total amount of £18,000 paid into Mrs Benye’s Select Account in April 2003, the next question which arises is, what was the joint intention of the parties? The authorities cited by Mr Hall show that it will be open to a court to conclude that someone who advances the deposit necessary for another to exercise the right to buy may be the directing mind of a transaction which is intended to benefit him alone. I must consider, however, by reference to the facts of the present case whether that was indeed the intention of Mr Benye, acquiesced in by Mrs Benye, or whether the parties had some other joint intention. I shall return to this when I examine Mr Hall’s proposition 6.

Proposition 1: Mrs Benye’s position in November 2003

[58]It is common ground that the £26,969.36 transferred to Hartnells on 10 November 2003 came from Mr Benye. The fact that 8 days later Mrs Benye repaid £27,000 to Mr Benye is in my view entirely consistent with Mr Benye having provided temporary finance in order to overcome an unforeseen difficulty. I consider it plausible that the unexpected and unwanted attentions of the immigration authorities in early November 2003 were the cause of such a difficulty. As noted earlier, Mrs Benye’s oral evidence about the dates was inconsistent with the evidence on the documentary record concerning her detention at Oakington. At this point in her evidence Mrs Benye had reached a stage where she was making wild assertions and showed little sign of being willing to think logically. I attribute this to her realisation that her lies as to the origins of the payments totalling £18,000 in April 2003 had been exposed, combined with a determination to avoid doing anything which might assist the CPS to take away the flat that she was living in. The result is that I am not satisfied that Mr Hall’s first proposition is correct.

Proposition 2: The transfer to Hartnells on 22 July 2003

[59]I do not consider that Mrs Benye’s explanation for this transfer is implausible. She states that it arose because of a mistake. She does not appear to be a person of any great financial sophistication. It is plausible that she mistakenly believed that the time had come for transfer of the deposit money. It is true that she has not lodged any evidence from Hartnells in this regard, but it is not clear to me that Hartnells could have added anything useful to the information she has provided. The mere fact that Mr Benye had previously put Mrs Benye in funds to the extent of £18,000 does not in my view lead to any inference that Mrs Benye transferred money to Hartnells in July 2003 on his instructions.

Proposition 6: The appropriate inference

[60]This proposition asserted that the Court was entitled to infer that there must have been a discussion between Mr Benye and Mrs Benye as to ownership, and that the true position could be inferred from Mr Benye’s acceptance at the confiscation hearing that the leasehold was solely his. For the reasons I have given in relation to proposition 5, I decline to draw any inference from the fact that Mr Benye eventually accepted at the confiscation hearing that the leasehold was solely his. As a matter of common sense, I think it right to infer that on or shortly before the dates when the sums of £6,000 and £12,000 were transferred into Mrs Benye’s Select Account, there was some discussion between her and Mr Benye as to the purpose of the transfer.[61]I find it implausible to think that the purpose of these transfers was to enable Mr Benye to acquire the sole beneficial interest in the Valentine Court flat. It was Mrs Benye who had been the tenant of the Council, and it was she who therefore had the right to buy. Her immigration status may have been precarious, but that did not affect the desirability of buying the leasehold at a substantial discount. She was no longer in a relationship with Mr Benye (see proposition 3), and had no reason to allow him to reap a benefit which was hers. Moreover, the mortgage was arranged in her sole name. She made the initial payments and had continued to make payments. Her earnings have proved to be sufficient to maintain those payments, and I see no reason to think that they were not considered to be sufficient at the time the transaction was entered into. Submissions by the CPS after the hearing have referred to substantial sums coming into her account. It is true that substantial sums appear to come into her account both before and after the arrest and imprisonment of Mr Benye. The cross-examination of Mrs Benye was confined to the two cash deposits in April 2003. As to other sums, I have no basis for concluding that they were not legitimate proceeds of Mrs Benye’s business.[62]Reliance was placed by Mr Hall on a statement in the confiscation proceedings that the purchase of the flat was intended to be an “investment”. When read in context, however, the statement refers to an investment for Mrs Benye and /or her children. There is no reason to read this as indicating an intention to confer a benefit upon Mr Benye.[63]It follows from this analysis that I do not accept the contention by the CPS that Mrs Benye would have complied with any request by Mr Benye to sell the property shortly before his arrest on 2.2.04, nor do I accept that if there had been such a sale she would have disbursed the proceeds at his direction.[64]The question remains whether Mr and Mrs Benye intended that he should have an interest in the flat proportionate to the funds that he had contributed, or whether the law would in all the circumstances confer upon him such an interest. Looking at the matter in the round, I am not satisfied that this was the case. In April 2003 when transfers in question were made Mr Benye was, on the prosecution’s own account, a prosperous fraudster. It seems to me to be more likely than not that his intention was to make a gift to Mrs Benye of the amounts in question in order to enable her to purchase the leasehold at an advantageous price. A wealthy fraudster may be quite capable of an act of generosity, designed to benefit his ex-wife and their children. Such an act of generosity on the part of Mr Benye could spring from one or more of a number of probable motives. Among them are affection that he had felt for Mrs Benye in the past, a recognition that he had been at fault in being unfaithful to her, and a desire to make provision for the future for her and for their children. In those circumstances I conclude on the balance of probabilities that Mr Benye did not acquire any interest in the Valentine Court flat.

Conclusion

[65]For the reasons I have given, this application by the CPS fails. I have given directions which I hope will enable the parties to reach agreement as to any consequential orders, or if they are not in agreement, to put their respective contentions before the court for determination on the papers.