Facts

On 14 February 2013, the complainant party, A., filed a criminal complaint against its former employee, B. (hereinafter: the accused), as well as against any potential accomplices, alleging damage of USD 3 million. A criminal investigation was opened against B. for fraud, breach of trust, forgery of documents and suppression of documents.

By order of 14 June 2013, the Central Public Prosecutor's Office of the Canton of Vaud (division for mutual assistance, economic crime and computer crime) ordered the sequestration of the following real estate properties:

  • S.: simple co-ownership and equal shares between B. and his wife, C.;
  • R.: individual ownership of the accused;
  • T.: common ownership of B. and his sister, D.

The Prosecutor registered restrictions on the right to dispose of these real estate properties.

By judgment of 13 August 2013, the Criminal Appeals Chamber of the Vaud Cantonal Court allowed the appeals of C. and D., as well as partially that of B. It found sufficient grounds to suspect that the accused, possibly with accomplices, had committed, inter alia, fraud or breach of trust amounting to approximately USD 717,778.88. The cantonal court annulled the sequestrations concerning the ownership shares of C. and D., finding that they were not under investigation. It also considered that, since the amount resulting from the offences could not be confiscated by the State but would have to be returned to the injured party, the sequestrations of B.'s shares in the properties S. and T. could not be ordered. However, it confirmed the sequestration on the building located at R., finding that the value of this property was sufficient to secure payment of procedural costs, fines, penalties and compensation.

On 19 September 2013, A. filed an appeal in criminal matters against this judgment (case 1B_326/2013), seeking its annulment and requesting confirmation of the sequestration order issued on 14 June 2013 by the Prosecutor. In the alternative, it requested that the case be remitted to the lower authority for a new decision.

The Public Prosecutor's Office also filed an appeal in criminal matters against the cantonal judgment (case 1B_327/2013), requesting that it be set aside to the extent that the cantonal appeals were allowed, that the sequestration order be confirmed and, in the alternative, that the case be remitted to the lower authority for a new decision. It also requested that the suspensive effect be granted.

By order of 28 October 2013, the President of the First Public Law Division granted the suspensive effect to the appeal. The Federal Supreme Court joined the two cases and partially allowed the appeals, annulling the cantonal judgment to the extent that it lifted the sequestration on the share of co-ownership held by B. in the property located at S.

Considerations

The Federal Supreme Court examined its jurisdiction ex officio and freely reviewed the admissibility conditions of the appeals submitted to it. It recalled that coercive measures in criminal matters, such as sequestrations, are procedural acts affecting the fundamental rights of the persons concerned and serving to secure evidence, ensure the presence of certain persons during the proceedings or guarantee the enforcement of the final decision. The Federal Supreme Court freely examines the interpretation and application of the conditions laid down by federal law for restricting fundamental rights, due to the seriousness of the interference and in order to ensure respect for fundamental rights guarantees. The limitation of grounds provided for in art. 98 FSCA and the principle of pleading under Art. 106 para. 2 SCC do not apply to decisions relating to coercive measures, including sequestrations of objects or assets.

The Federal Supreme Court considered that since a penal sequestration is an incidental decision, an appeal is admissible only if the challenged act is likely to cause irreparable harm. This was the case here, as both the State, represented by the Public Prosecutor's Office, and the complainant party saw the guarantee of their claims for payment of a possible compensatory claim compromised by the lifting of the sequestrations on two of the three properties in question. The complainant party was entitled to appeal to the Federal Supreme Court, as the challenged decision could have effects on the judgment of its civil claims. It had a legal interest in the annulment of the decision under appeal, which, by lifting the sequestrations, deprived it of a guarantee of payment in the event that such an order were to be rendered in its favour. The same applied to the Public Prosecutor's Office, which was defending the interests of the State, the beneficiary of a possible compensatory claim or a share thereof.

The Federal Supreme Court recalled that sequestration is generally ordered in criminal matters on the basis of Art. 263 CrimPC, allowing for the sequestration of objects and assets belonging to the accused or to third parties, where it is probable that they will be used as evidence, to secure payment of procedural costs, fines, penalties and compensation, that they will have to be returned to the injured party or that they will have to be confiscated. With regard in particular to sequestration for the purpose of confiscation, this provisional protective measure is based on likelihood and is justified as long as there is at least a prima facie possibility of confiscation under the SCC. Art. 70 para. 1 SCC authorises the judge to confiscate assets that are the proceeds of an offence, if they are not to be returned to the injured party to restore their rights. The purpose of this measure is to prevent a person from benefiting from an offence.

The Federal Supreme Court also recalled that where the illicit gain is to be confiscated but the assets representing it are no longer available, the judge orders a compensatory claim against the State for an equivalent amount. The SCC does not expressly provide for a provision allowing sequestration to secure a compensatory claim. However, Art. 71 para. 3 SCC allows the investigating authority to sequester, for the purpose of enforcing a compensatory claim, assets with no connection to the facts under investigation. This measure differs from the protective sequestration resulting from Art. 263 para. 1 TSOA. c or d CrimPC, which requires such a connection. It is only at the end of the main proceedings that the possible final order for a compensatory claim and its possible allocation to the injured party will be examined. It follows that, as long as the investigation is not completed and there remains a possibility that a compensatory claim may be ordered, the protective measure must be maintained.

The Federal Supreme Court considered that the reasoning of the lower court amounted to denying the State and the complainant party any guarantee for the payment of the possible share of the compensatory claim. The injured party may, if a crime or offence has caused it damage, request the judge to allocate to it, up to the amount of damages or moral reparation fixed by a judgment or a settlement, the confiscated objects and assets or the proceeds of their realisation, or compensatory…