Clean Hands, Clean Title: Navigating Good Faith and Ownership in Modern Fraud Litigation

Tanveer Qureshi examines the intersection of civil and criminal law in Khan v Allana (2025), exploring how principles of title, honesty, and good faith continue to define modern fraud disputes.

I was instructed on behalf of the Claimant in the recent first-instance judgment of Khan v Allana (2025), a case that vividly illustrates how traditional property principles intersect with the realities of modern fraud litigation.

The dispute concerned ownership of a valuable Audemars Piguet watch and required the Court to determine whether a purchaser acting in good faith could acquire better title than an original owner alleging loss.

Having appeared in the case, I was reminded how often these issues arise at the boundary between civil and criminal law a space in which I regularly practise, navigating both the commercial and criminal arenas where allegations of fraud, deceit, and financial misconduct converge.

The analytical tools are similar: proof of ownership in the civil court and proof of criminal provenance in the Crown Court both demand precision about evidence, motive, and credibility.

This article explores that shared territory by examining the intersection between nemo dat quod non habet the principle that no one can give what they do not have and the Proceeds of Crime Act 2002 (PoCA).

The Court of Appeal recently considered the provisions of PoCA in The King (on the application of World Uyghur Congress) v National Crime Agency [2024] EWCA Civ 715, and applied the same in determining when tainted property may, or may not, be “cleansed” through acquisition in good faith.

Under section 21 of the Sale of Goods Act 1979, a person cannot transfer better title than they possess. The exceptions, voidable title, estoppel, and sale by a person in possession are all premised on the good faith of an innocent purchaser.
In Khan v Allana, that doctrine was decisive: the defendant’s account of loss was contradictory, and no theft was proved. The watch was, at most, subject to voidable title, and the claimant having purchased in good faith and for value took good title. The judge’s findings underline that the burden rests on the party asserting loss to establish factual dispossession.

The Court of Appeal in World Uyghur Congress v NCA noted that the definition of “criminal property” in the Proceeds of Crime Act 2002 (PoCA) “is not only very broadly expressed, but it is a fluid one which depends on the state of mind of the alleged offender”. The court recognised, the same asset can be clean in one person’s hands and criminal in another’s, depending on their state of mind.

Critically, payment of adequate consideration the statutory defence under section 329(2)(c) does not “cleanse” criminal property. The taint only lifts if section 308 applies: where property has been acquired for value, in good faith, and without notice of the underlying criminality. This echoes the nemo dat logic: a bona fide purchaser for value can break the chain of taint.

The question of title, in both the criminal and civil jurisdiction are built on the same basic idea that once property becomes tainted, it can only be made “clean” again if it passes to someone who acts honestly, pays proper value, and has no reason to suspect anything is wrong.

In civil law, the source of taint lies in a defect of title where someone sells what they do not own whereas in criminal law under POCA, the taint arises because the property represents the proceeds of crime. Each system provides its own route to purification. In the civil sphere, title may pass to a good-faith purchaser for value without notice, unless there is evidence that the original owner did not voluntarily part with the property, since involuntary loss or theft prevents any title from passing at all. In the criminal sphere, section 308 of POCA removes the criminal character of property acquired for value, in good faith, and without knowledge or suspicion of its illicit origin.

The burden of proof differs, civilly it rests on the party alleging defective title; criminally it lies on the prosecution to prove knowledge or suspicion but both regimes treat state of mind as decisive.

In each, the law distinguishes between the innocent acquirer who deals honestly and the wilfully blind actor who ignores obvious red flags. Title and criminal purity are thus preserved by the same moral and evidential principle: good faith and absence of notice cleanse what would otherwise remain contaminated.

The symmetry between nemo dat and the statutory scheme of POCA has practical importance that extends well beyond theoretical comparison. In civil fraud litigation, tracing and restitution hinge on whether title ever validly passed; if the original transferor’s title was void or voidable, the downstream recipient may acquire no better title, and recovery follows.

In criminal confiscation, by contrast, the central question is whether the property retains its criminal character if it remains the proceeds of crime, it is liable to recovery regardless of subsequent transfers. Yet the dividing line in both systems is the same: good faith.

Each regime penalises wilful blindness. A purchaser who ignores suspicious circumstances risks losing the protection of section 23 of the Sale of Goods Act, just as one who acquires property under section 308 of POCA with suspicion or awareness of criminal provenance cannot rely on statutory immunity.

The parallel demands of honesty and inquiry mean that both civil and criminal fraud cases ultimately turn on an evaluation of state of mind, inference, and evidential discipline. This convergence explains why modern commercial fraud advocacy requires practitioners to operate fluently across both jurisdictions navigating the interplay between title, suspicion, and the differing burdens of proof that govern the civil and criminal response to tainted assets.

For practitioners, the message is clear adequate consideration alone is not enough; due diligence and absence of suspicion remain essential.

Nemo dat quod non habet and the idea of criminal property are based on the same simple test of honesty. Both ask whether a person who receives property does so cleanly or carries forward the stain of wrongdoing. In each case, the law looks not just at the price paid but at what the buyer knew or should have known. The closer the buyer is to suspicion, the less protection the law gives.

In the judgment, the Judge specifically praised Mr Qureshi’s handling of the case, noting that his cross-examination was “highly skilled.”