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

High Court ruling was part of a failed UAE extradition case over defaulted mortgage payments
Prisoner, debt, jail
By Shane McGinley
Tue 24 Jul 2012 10:04 AM

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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