National Crime Agency v Dong [2017] EWHC 3116 (Ch)

Facts

• The case involved funds held in bank accounts in the name of Mr. Dong, alleged by the National Crime Agency (NCA) to be proceeds of crime.
• The NCA obtained a property freezing order under the Proceeds of Crime Act 2002 (POCA), asserting the funds were recoverable property.
• Mr. Dong argued that the funds were held on a resulting trust for a third party, claiming this excluded them from being classified as his under POCA.
• The central question was whether the circumstances permitted the establishment of a resulting trust over the funds suspected of being involved in money laundering.

Issues

1. Whether the funds in Mr. Dong’s bank accounts could be subject to a resulting trust in the context of suspected proceeds of crime under POCA.
2. What evidential standards apply in establishing a resulting trust when money laundering is alleged.
3. How the equitable principles of resulting trusts should be reconciled with the statutory framework and objectives of POCA.

Decision

• The court held that the party asserting the existence of a resulting trust bears the burden of proving a lack of intention to make a gift.
• Mr. Dong’s evidence in support of the alleged resulting trust, including any third party beneficial ownership, was found to be insufficient.
• The court emphasized that arrangements claimed to be resulting trusts must be scrutinized especially carefully when there are money laundering allegations, as such structures can conceal true ownership.
• The funds remained labeled as recoverable property under POCA, and the property freezing order was upheld.

Legal Principles

• A resulting trust arises when property is transferred without intention to confer a beneficial interest; the transferor retains equitable title unless the contrary intention is demonstrated.
• The presumption of a resulting trust may apply to bank funds unless there is clear evidence of a gift or other disposition of beneficial interest.
• Under POCA, statutory objectives targeting recovery of criminal proceeds may override equitable arguments if the trust claim is not robustly evidenced.
• The party claiming a resulting trust bears the evidential burden to show the requisite lack of intention to make a gift, especially where money laundering is alleged.

Conclusion

The court clarified that robust, credible evidence is required to establish a resulting trust over funds suspected as proceeds of crime, and that such claims are rigorously scrutinized in light of statutory anti-money laundering objectives under POCA. The judgment affirms the primacy of the statutory regime where trust arguments are not sufficiently substantiated.