Lawful arrest — a case against Chelmsford Crown Court and Chief Constable of Essex

R (on the application of (1) Terence William Norman (2) Georgia Lee Norman (3) Terence Charles Norman) v (1) Chelmsford Crown Court (2) Chief Constable of Essex [2020] 

Executive summary

The court determined that although a husband and wife were innocent of fraud and money laundering, their arrests were in fact lawful. The police officers believed, and had reasonable grounds for suspecting, that they had both committed the offences as required by Section 24 PACE 1984. It had also been reasonable to believe the husband’s arrest was necessary to prevent collusion, and there were reasonable grounds for suspecting that the wife had hidden cash to frustrate the police inquiry, making her arrest necessary too.

Background

In February 2019, the police received intelligence suggesting that the husband was running an investment scheme as a vehicle for fraud. Concerns had also been raised by a financial institution in September 2018, relating to a deposit for cash to purchase shares in the same investment scheme. The police made enquiries into the husband that showed he had not been employed and had not paid income tax since 2008. However, bank accounts associated with him and his companies had a turnover in excess of £1 million. His personal bank account also had a balance of £202,000, and a turnover between February 2018 and February 2019 of £640,000. There were also suspicions relating to the husband’s companies, and the substantial farm property where he resided with his wife was not subject to a mortgage.

Search warrants were applied for and the decision was made to arrest the husband. The warrants were executed on 16 April 2019, and the police attended the husband and wife’s farm. On arrival, there had been a delay in answering the intercom on the electric gates, and a further delay once DI Adler reported that he had a search warrant. The husband was arrested on suspicion of fraud and money laundering after a safe containing cash was located. Carrier bags containing cash were also found concealed in bushes at the back of the garden. There were said to be footmarks across the dew on the lawn heading to the bushes, and a pair of ladies’ trainers were found wet with grass cuttings. The wife was the only female present. DI Adler and DC O’Toole suspected that she had placed the bags of cash in the hedge to conceal them from the police officers conducting the search. The wife was then also arrested on suspicion of fraud and money laundering. In total, around £100,000 in cash was found in the house and the bushes. The son was also arrested.

On 17 July 2019, the husband, wife and their son issued a claim for judicial review seeking a review of their arrests and the execution of the search and seizure order. The Chief Constable issued grounds of part-concession and part-resistance, accepting amongst other things that the search warrant relating to the farm and the offices should be quashed and that all property seized under the warrant should be returned. It was also accepted that the arrest of the son was unlawful on the grounds that the arresting officer did not subjectively have reasonable grounds for suspecting that he had committed the offences for which he was arrested. Damages for the son totalling £3,500 for wrongful arrest were subsequently agreed.

However, the claims for wrongful arrest made by the husband and wife were resisted. Permission to apply for judicial review of these arrests was granted.

The decision

In examining the state of mind of DI Adler at the time of the arrest, Dingemans LJ was satisfied that DI Adler suspected that offences of fraud and money laundering had been committed and that the husband was guilty.

In relation to whether there were objectively reasonable grounds for suspecting the commission of the offences of fraud and money laundering, Dingemans LJ held that there were. Intelligence reports had suggested that a financial algorithm created by the husband was being sold to investors for nothing in return. The informant had directly spoken to DI Adler, implying that he was not just a malicious complainant. On the basis of the intelligence, the judge found that it was reasonable to assume that the shareholders were the victims of fraud. Although there was no evidence of complaints from the shareholders, Dingemans LJ highlighted that victims of fraud are usually the last to realise they are victims. The companies owned by the husband had no relevant turnover, and this also supported the intelligence that the shareholders had received nothing for their money. Further, the husband had sold the shares in cash, suggesting that no reasonable checks about the source of funds had been made. Therefore, there were also reasonable grounds to suspect money laundering. The assets possessed by the husband and wife also mismatched those which had been declared as income to HMRC.

Dingemans LJ further found that DC O’Toole suspected the wife was guilty of the offences. Although all the reasonable suspicions were primarily related to the husband, the wife was also an officer of the company in question, was living with her husband, and seemed to benefit from the suspected fraud and money laundering. In addition, the presence of cash lying around the farm indicated that it was reasonable to suspect that the wife was also involved. Therefore, Dingemans LJ concluded that there were also reasonable grounds for suspecting the wife had committed the offences.

As to necessity, the judge accepted that DI Adler believed that it was necessary to arrest the husband under section 24(5) PACE. He had always planned to arrest him in order to obtain his account of the source of his wealth without any collusion with other suspects or his wife. It was further accepted that in those circumstances the arrest was necessary.

In relation to the wife, DC O’Toole believed the wife had hidden bags of cash in an attempt to frustrate the police investigation. Dingemans LJ, therefore, concluded that it was also reasonable to believe the arrest of the wife was necessary, as it allowed for a prompt and effective investigation pursuant to section 24(5)(e) PACE.

In summary, although the husband and wife were ultimately held to be innocent of the criminal offences, Dingemans LJ and Mr Justice William Davis refused their claim for a declaration that their arrests were unlawful.

Comment

This is an interesting case that demonstrates the importance of compliance with Section 24 PACE when it comes to the arrest of suspects. Although the husband and wife were eventually found to be innocent, the officers had properly demonstrated that they believed, and had reasonable grounds for suspecting, that the husband and wife had committed the offences, and that it was reasonably necessary to arrest them both. This highlights how crucial it is for officers to comply with the requirements under Section 24 PACE, so that even when a suspect may eventually be found to be innocent, the officers’ actions can be properly justified and any arrest will be deemed lawful.