Jail for bounced cheques "makes no sense" - UK judge

High Court ruling was part of a failed UAE extradition case over defaulted mortgage payments

Custodial sentences for bouncing cheques “makes no sense”, a UK High Court judge ruled as he refused the UAE government’s extradition request for a former British expatriate in the Gulf state who was sentenced to three years in jail in absentia for defaulting on mortgage repayments and absconding back to the UK.

The UAE initiated extradition procedures against Amanda Allen, who defaulted on an AED2.38m (US$647,989) mortgage with Abu Dhabi Commercial Bank (ADCB).

Allen, who worked for a hospitality and leisure company and earned AED35,000 (US$9,500) a month, took out the mortgage in May 2008 ran into difficulty making repayments in 2009.

Although she made a lump sum repayment of AED800,000 before she returned to the UK in late 2009, Allen still owed AED1.5m on her 20-year mortgage, according to court documents.

ADCB subsequently attempted to draw down an undated security cheque Allen had supplied when she took out the mortgage. When this bounced, she was later convicted in her absence and sentenced to three years in jail for cheque fraud.

On 22 March 2011, the UK Home Secretary validated a request from the UAE government for Allen’s extradition and she was arrested and brought before Westminster Magistrates Court.

The UAE’s case, argued by the UK Crown Prosecution Service, was thrown out by the magistrate court in December 2011 and an appeal in the High Court was dismissed in June 2012.

According to court documents, Magistrate District Judge Purdy ruled “he did not consider that default in a loan agreement supported by the security of an undated cheque could of itself amount to an offence in the UK”.

In his High Court appeal ruling, Lord Justice Toulson hit out at the use of undated cheques as security for loans or mortgages and the prosecution of clients who defaulted during the financial crisis.

“Illness, accident and unemployment are not outside the ordinary course of human events over a 20 year period. Was the respondent to be taken as saying that in such an event, resulting in a default, her circumstances at the time of the loan were nevertheless such that the cheque would be met, albeit that she was unable to fulfil her primary repayment obligations? It makes no sense,” Lord Justice Toulson was quoted as saying in court documents.

The Allen case is one of a handful of extradition cases which the UAE government has filed with the UK’s Home Office in recent months. However, the majority of the cases have been rejected and a London-based solicitor who worked on a similar case said this was likely to dissuade UAE authorities pursuing more of such cases against UK expatriates who absconded and defaulted on loans in the UAE.

Amanda Allen could not be contacted for comment and her legal team did not respond to calls or emails.

ADCB’s spokesperson declined to comment on the case when contacted by Arabian Business.

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Posted by: Meezan

@ Bugle, you seem to have an issue with developers but you do not seem to point any finger at the impetuous lot who jumped the bandwagon and bought into unrealistic projects; this is what happens to those who don't do their homework before buying anything leave alone a property. Off-plan property has its own benefits so long as you buy it from a credible developer with a good track record, otherwise you are taking a huge risk.

Posted by: Bugle

The topic here is about criminal intent. Not about people making bad decisions . You can blame investors for not doing their homework (even that is debateable given that many wll known developers have let people down) but you can't blame them for purposely wrtiting bad cheques with an intent to defraud the banks which is an accustaion made by several writers. However you can blame developers for not meeting contractual obligations, taking peoples money and not delivering , not compensating and still not being held to account. If the projects were unrealistic like you say they should have been stopped by the relevant body.

Posted by: Geko

@Meezan, if Palm is realistic, what is unrealistic in your encyclo?
If Nakeel of 2006 was incredible, who else?
No homework succeeded, when it comes to bandwagon, of course you remember suksuk.

Some ex-insurance claim surveyors should confirm the reasons behind jailing. Is that mandatory for the banks to submit police report against any policy or refinance claim?

Posted by: Salvatore

Can you please name credible developers with good track record that have not at one moment or another breached his contractual obligations?

Posted by: Sanda

I want to ask those who are in favor of jailing, how this goes with the below article from the Arab Charter on Human Rights - which UAE has retified and which states that "No one who is shown by a court to be unable to pay a debt arising from a contractual obligation shall be imprisoned." (Article 18). You all, google it out and explain how - when you prove that you are unable to pay - can you get jailed?

Posted by: iqbal

I am an ex-banker and i agree with Michel. It is the bank's primary duty to do it's due diligence prior to lending and not rely on an undated or post dated cheque. Moreover the property is mortgaged to the bank and if the developer did not deliver as contracted the bank has to first use it''s first recourse against the developer and not it's client that has been defrauded.
Banks want the police & courts to become their debt collectors and this is not right.

Posted by: Salawy

To Faheem and Essam, imagine the following: you are working in a good company, progressing well in your career, and then you decided to invest in real estate, to buy your home using a mortgage on 20 years, why not.
2 years later, your company decides to make your job redundant, not because you are bad, just because recession forced companies to down size. Now you are jobless, banks sends you to jail, the question is are you a criminal? Is it your fault that you believed in the dream the country offered to expats or locals? Off course not?
Laws Needs to be revised to regulate properly between owners, banks and development companies.

Posted by: Johnny Smith

I am delighted to see the ruling of the UK Judge as it demonstrates that there is still justice in the world. Amanda is a normal business woman who have bought a property in all good faith. She had to give cheques at the time of the purchase and was perfectly capable to meet her mortgage repayments when she was working (there is no fraud there).

As it was outlined clearly in the Judge's words ?Illness, accident and unemployment are not outside the ordinary course of human events over a 20 year period" meaning that anyone of us could be in her shoes. you can fall sick whilst you have a mortgage, you can lose your job, or you may have an accident that does not allow you to continue with your repayments.

Dubai has failed to realise these normal human events, not only Amanda has lost her property, she lost the AED 800,000 paid as a lump sum and God knows what else, got a bad name she had to leave Dubai in a hurry and move her life to another country. ADCB on the other hand is the winner

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