Mrs Minwalla continues her extraordinary journey through the Royal Court with yet another judgment being handed down, this time calling for legislative change rather than prompting it.

In December 2004, Singer J in the Family Division of the High Court of England and Wales made an order for ancillary relief in favour of Mrs Minwalla on the back of a detailed judgment. Singer J found that a Jersey-law trust, the Fountain Trust, was a sham and that the assets in the Fountain Trust, namely the share capital of two companies belonged to the husband. He awarded the wife a lump sum and maintenance of which nothing has so far been paid. He also ordered that the husband should transfer the shares in the companies to Mrs Minwalla and, in support thereof, ordered the Trustees to do all that was necessary to effect the transfer of the shares.

The Trustees applied for directions from the Royal Court of Jersey. Despite opposition from the husband, his children (the purported beneficiaries under the Trust), purported creditors of the companies, the Government of Pakistan and Her Majesty’s Attorney General in Jersey, in July 2005, the Royal Court ordered that the Order of Singer J ought to be put into effect in Jersey. It did so notwithstanding its comments that it would regard an assumption of jurisdiction by a foreign court to declare a Jersey trust a sham to be exorbitant and would be reluctant to enforce any judgment based upon such an assumption. However, on the particular facts of the case and given the attitude of the husband coupled with the fact that the Trustees had voluntarily submitted to the jurisdiction of the English court, the Court decided to recognise and enforce the English judgment in part. That decision was one of the catalysts for the recent amendment to the Trusts (Jersey) Law 1984 which now purports to reserve questions as to whether Jersey-law trusts are shams to the Royal Court alone and seeks to prevent foreign matrimonial orders being put into effect in Jersey without more.

When the Royal Court put the order into effect, it did however give permission to the Government of Pakistan and Her Majesty’s Attorney General (on behalf of the Jersey Police) to make further submissions. It took nigh on 2 years for those submissions to be made and for judgment to be pronounced on them. Once again, Mrs Minwalla has prevailed albeit that this time the Royal Court has recommended legislative change so as to provide a more equitable path through the legislation.

The issue in the proceedings between Mrs Minwalla and the Jersey Police (the Government of Pakistan eventually withdrew) was whether the assets in the Fountain Trust were the proceeds of crime. The police were of the view that Mr Minwalla had been involved in criminal activities in Pakistan in relation to the sale of various aircraft by Cathay Pacific to Pakistan International Airways (“PIA”) between 1999 and 2002. The police asserted that PIA had been defrauded and that the Trust assets represented the proceeds of crime.

What was startling about the Police’s claim was that this matter seemed to concern only the Jersey Police. At the time of the hearing, the Government of Pakistan (the majority shareholder in PIA) had taken no steps to freeze the husband’s assets in Pakistan; despite allegations being made against Cathay Pacific and the Hong Kong police having been informed, they had taken no steps against Cathay Pacific (and indeed, there was not even an investigation afoot in Hong Kong); nor was there even a statement of complaint from PIA. Yet the Jersey Police persisted in their assertions. They chose to call only one witness, the head (at that time) of the Joint Financial Crimes Unit. As the Court noted “he had no first-hand knowledge of the matters in question and accordingly his evidence is comprised almost entirely of hearsay”. Probably not surprisingly, the Police failed to establish their assertions whether on the balance of probability or indeed, at all. Time and again throughout the judgment, the Royal Court held that there was “no evidence” to support their case.

What is however surprising, and does little credit to the anti-money laundering legislation in operation in Jersey, is that it took Mrs Minwalla two years to establish that the concerns of the Jersey Police were groundless. Although she was “the hard-pressed wife (who is desperately short of money)”, throughout that period she had been unable to use the monies to which she was rightly entitled under the order of Singer J.

In the United Kingdom the relevant legislation was amended in 2002 so as to provide that the police have seven days from being notified of concerns about the legitimacy of monies in which to respond. If no response is given they are deemed to have consented to any dealing with the funds. If they respond within the seven days and refuse consent to any dealing with the monies, they have a further thirty one days in which to apply for a restraint order. If they have taken no such action at the expiry of thirty one days after their refusal of consent, the monies can be safely dealt with. As the Court of Appeal recently noted, this struck a fair balance between the competing interests of the parties and the public.

There are no such timescales in Jersey. Under the Jersey legislation the police can simply refuse consent to deal with the monies and they are then subject to an informal freeze until the police decide otherwise (or are forced so to decide). As the Court noted, “this is clearly capable of causing great hardship and unfairness.” In Mrs Minwalla’s case, it took a great deal of pressure and persuasion to get the matter to a trial and a further 3 days of hearing to get to a decision. In all, nigh on 2 years had elapsed since the Court first decided that it ought to put the Order of Singer J into effect before the police were told to change their position. Accordingly, the Royal Court concluded its judgment with a plea for immediate consideration of amendments to the Proceeds of Crime legislation to mirror those which have been introduced in the UK in order to avoid the practical difficulties and potential injustice suffered by Mrs Minwalla.

Having represented Mrs Minwalla throughout, one can only hope that this plea will be heeded. As for Mrs Minwalla, it is often said that hard cases make bad law. However each decision obtained by her seems to trigger a call for legislative change. In the meantime, Mrs Minwalla continues in her world-wide fight to satisfy the judgment given by Singer J.