King v Serious Fraud Office
| Jurisdiction | England & Wales |
| Judge | LORD MANCE,LORD PHILLIPS OF WORTH MATRAVERS,LORD WALKER OF GESTINGTHORPE,LORD SCOTT OF FOSCOTE,LORD BROWN OF EATON-UNDER-HEYWOOD |
| Judgment Date | 18 March 2009 |
| Neutral Citation | [2009] UKHL 17 |
| Date | 18 March 2009 |
| Court | House of Lords |
[2009] UKHL 17
HOUSE OF LORDS
Appellate Committee
Lord Phillips of Worth Matravers
Lord Scott of Foscote
Lord Walker of Gestingthorpe
Lord Brown of Eaton-under-Heywood
Lord Mance
Appellant:
Andrew Mitchell QC
Fiona Jackson
(Instructed by The Restraint and Confiscation Unit, Serious Fraud Office)
Respondent:
David Perry QC
Louis Mably
(Instructed by Kingsley Napley)
My Lords,
Mr King, the respondent to this appeal, is a British subject who has for 30 years been resident in South Africa. He has been charged by the Office of the National Prosecuting Authority of the Republic of South Africa ("the NPA") with fraud on a very large scale. He was originally arrested in South Africa on 13 June 2002. He was served with an indictment on 29 April 2005, which was amended on 17 March 2006. He now faces 51 counts of fraud, 34 counts of contravening income tax legislation, 234 counts of contravening exchange control regulations, 2 counts of money laundering and 1 count of racketeering. His trial has been adjourned on a number of occasions. He has been granted bail and the return of his passport and has been permitted, on occasion, to travel outside South Africa.
This appeal arises out of a Letter of Request sent by the NPA to the United Kingdom Central Authority in London and to the Lord Advocate in Edinburgh dated 9 May 2006 seeking assistance in obtaining restraint orders over property of the respondent. The Letter of Request was referred to the appellant and, on 26 May 2006, the NPA wrote to the appellant varying the terms of the orders sought so as to make it clear that they covered property of a number of companies that were alleged to be "Alter Ego Entities" of the respondent.
The introduction to the Letter of Request requested assistance in seeking:
"(a) orders restraining Mr King from dealing with realisable property in (i) England and Wales, and (ii) Scotland, in order to make such property available to be recovered by means of an external confiscation order which will be sought, and (it is anticipated) on conviction granted, in criminal proceedings pending against Mr King in South Africa; and
(b) an order that Mr King swear an Affidavit setting out full details of all assets belonging to him and/or which he has the power, directly or indirectly to dispose of or deal with as his own, wherever located; and
(c) such other investigative assistance as may be appropriate in order to establish up to date factual information in relation to the assets, belonging to Mr King and/or which he has the power, directly or indirectly, to dispose of or deal with as his own, located in the UK."
Paragraph 16 of the Letter of Request requested, inter alia, application for an order which
"(a) restrains Mr King from dealing with such realisable property (as defined in the relevant legislation, and including all property owned by Mr King or which he has the power, directly or indirectly, to deal with as if it were his own, including all assets held by the Alter Ego Entities) as is within the jurisdiction of the Court; and
(b) requires Mr King to swear an affidavit disclosing the full extent of his assets and those of the Alter Ego Entities, wherever situated, and…"
The Letter of Request set out in detail the basis on which the NPA contended that the property of the Alter Ego Entities represented property of the respondent. It set out a schedule of bank accounts of these companies which it stated were believed to be "held in England and Wales".
The Letter of Request explained that the purpose of the order sought was to make the restrained property available to be recovered by means of a confiscation order which would be sought in South Africa if and when the respondent was convicted.
The Letter of Request exhibited a draft order. This was in a standard form in common use in the Crown Court in proceedings arising out of prosecutions within this jurisdiction. This had been supplied to the NPA by the appellant.
On 31 May 2006 Judge Wadsworth QC, sitting in the Crown Court at Southwark, made an order pursuant to the Letter of Request. This order was in the terms of the draft order that had been exhibited to the Letter of Request. Its provisions included the following:
"DISPOSAL OF OR DEALING WITH ASSETS
5. The Defendants must not until further order of the court:
(1) remove from England and Wales any of their assets which are in England and Wales; or
(2) in any way dispose of, deal with or diminish the value of any of their assets whether they are in or outside England and Wales.
6. The prohibition against disposing or dealing with assets or diminishing their value includes the following assets in particular:
(a) the property within the jurisdiction as set out in the Schedule annexed hereto marked 'D' or the proceeds of sale if it has been sold;
(b) the property and assets of the businesses within the jurisdiction as set out in the Schedule annexed hereto marked 'D' or the proceeds of sale if any of them have been sold; and
(c) any money in the accounts within the jurisdiction as set out in the Schedule annexed hereto marked 'D'."
This has been described as "the Restraint Order".
The provisions of the order further included the following:
"PROVISION OF INFORMATION
Each Defendant shall serve a witness statement of all his assets wherever located certified by a statement of truth on the Serious Fraud Office within 31 days of the service of this Order as required by the Disclosure Order set out in Schedule C annexed to this Order."
This has been described as "the Disclosure Order".
The order was made on an application without notice. The respondent applied unsuccessfully to Judge Wadsworth on 23 April 2007 to have it discharged. He then appealed to the Court of Appeal which, on 18 March 2008, allowed his appeal to the extent of substituting an order that related only to property in England and Wales: [2008] 1 WLR 2634. The appellant seeks to reverse the decision of the Court of Appeal.
The issue raised by this appeal is whether the Crown Court had jurisdiction to include within the ambit of the Restraint Order and the Disclosure Order property outside England and Wales.
Restraint orders, pursuant to requests from the NPA have also been made against the respondent in Guernsey on 9 June 2006 and in Scotland on 29 June 2006.
The statutory scheme
The power of the Crown Court to make a restraint order is derived from the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (SI 2005/3181) ("the Order"), which was made under sections 444 and 459(2) of the Proceeds of Crime Act 2002 (" POCA"). POCA has replaced restraint and confiscatory regimes under the Criminal Justice Act 1988 ("the CJA 1988") and the Drug Trafficking Act 1994 ("the DTA 1994"). A separate regime exists in relation to certain terrorist offences under the Terrorism Act 2000.
POCA deals primarily, as did the antecedent legislation, with orders arising out of criminal proceedings within the jurisdiction. Section 444 of POCA provides, however, that Her Majesty may, by Order in Council,
"(a) make provision for a prohibition on dealing with property which is the subject of an external request;
(b) make provision for the realisation of property for the purpose of giving effect to an external order."
Section 447 of POCA deals with "interpretation" and provides:
"(1) An external request is a request by an overseas authority to prohibit dealing with relevant property which is identified in the request.
(2) An external order is an order which -
(a) is made by an overseas court where property is found or believed to have been obtained as a result of or in connection with criminal conduct, and
(b) is for the recovery of specified property or a specified sum of money…
(4) Property is all property wherever situated…
(7) Property is relevant property if there are reasonable grounds to believe that it may be needed to satisfy an external order which has been or which may be made."
Part 2 of the Order is headed "Giving Effect in England and Wales to External Requests in Connection with Criminal Investigations or Proceedings and to External Orders Arising from such Proceedings". Relevant provisions in Chapter 1, which is headed "External Requests", are as follows.
Article 6 provides that the Secretary of State may refer an external request in connection with criminal proceedings or investigations in the country from which the request is made, and which concerns relevant property in England or Wales, to the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions or, where the request relates to an offence involving serious or complex fraud, to the appellant. Article 6(7) provides that where a request also concerns relevant property which is in Scotland or Northern Ireland, so much of the request as concerns such property shall be dealt with under Part 3 (Scotland) or, as the case may be, Part 4 (Northern Ireland). Article 8 provides that the Crown Court may make a restraint order if either of the two conditions in article 7 is satisfied.
The two conditions in article 7 are as follows:
"(2) The first condition is that -
(a) relevant property in England and Wales is identified in the external request;
(b) a criminal investigation has been started in the country from which the external request was made with regard to an offence, and
(c) there is reasonable cause to believe that the alleged offender named in the request has benefited from his criminal conduct.
(3) The second condition is that -
(a) relevant property in...
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