Serious Organised Crime Agency v Perry

JurisdictionEngland & Wales
JudgeLORD WILSON,LORD PHILLIPS,LORD JUDGE AND LORD CLARKE,SIR ANTHONY HUGHES,LORD BROWN,LADY HALE,LORD REED,LORD KERR
Judgment Date25 July 2012
Neutral Citation[2012] UKSC 35
Date25 July 2012
CourtSupreme Court
Perry and Others
(Appellants)
and
Serious Organised Crime Agency
(Respondent)
Perry and Others No. 2
(Appellants)
and
Serious Organised Crime Agency
(Respondent)

[2012] UKSC 35

before

Lord Phillips, President

Lady Hale

Lord Brown

Lord Judge

Lord Kerr

Lord Clarke

Lord Wilson

Lord Reed

Sir Anthony Hughes

THE SUPREME COURT

Trinity Term

On appeal from: [2010] EWCA Civ 907; [2011] EWCA Civ 578

Appellants

Philip Jones QC

David Johnston QC

Daniel Lightman

(Instructed by Asserson Law Offices)

Respondent

James Eadie QC

Richard Keen QC

Sarah Harman

Donald Lilly

(Instructed by Serious Organised Crime Agency Legal Department)

Heard on 20, 21 and 22 March 2012

LORD PHILLIPS (WITH WHOM LADY HALE, LORD BROWN, LORD KERR AND LORD WILSON AGREE)

1

This is a judgment in two appeals that this Court heard together. They raise issues as to the scope of the powers conferred by the Proceeds of Crime Act 2002 (" POCA"). They arise out of attempts by the respondent ("SOCA"), acting apparently on its own initiative, to deprive the first appellant ("Mr Perry"), together with members of his family or entities associated with them, of the fruits of serious criminal fraud for which Mr Perry has been convicted in Israel, wherever in the world those fruits may be found. SOCA intends to achieve this aim by invoking the powers of civil recovery conferred on the High Court by Part 5 of POCA. So far, however, it has not got beyond preliminary steps aimed at ensuring that the substantive relief which it seeks is effective. One of those steps has been obtaining a worldwide property freezing order in respect of property held by the appellants in appeal 0143. I shall call this "the PFO appeal". The other step has been to obtain a disclosure order, under which notices have been given to the appellants in appeal 0182. I shall call this "the DO appeal". It is logical to consider the PFO appeal first, for the result of this appeal will have some bearing on the DO appeal.

THE PFO APPEAL
Introduction and factual background
2

Some of this introduction will be relevant to both appeals. The substantive relief that SOCA seeks consists of civil recovery orders in relation to property obtained through Mr Perry's unlawful conduct. In order to prevent the dissipation of that property SOCA has obtained a worldwide property freezing order pursuant to section 245A of POCA (in future all statutory references will be to POCA unless I state otherwise). Section 245A gives SOCA the power to seek a property freezing order where it is empowered to take proceedings for a civil recovery order. It is common ground that a property freezing order can only relate to property that can properly be made the subject of a civil recovery order. The appellants contend that, subject to a limited exception, a civil recovery order can only be made in respect of property that is within the territorial jurisdiction of the court making it. On this ground the appellants attack the validity of the property freezing order in so far as this extends to property outside that jurisdiction. Thus the important issue raised by the PFO appeal is the extent to which a recovery order can be made in respect of property outside the United Kingdom.

3

Lea Perry is Mr Perry's wife and Tamar Greenspoon and Yael Perry are his daughters. Leadenhall Property Ltd is an Isle of Man company alleged to hold assets on behalf of Mr Perry.

4

On 24 October 2007 Mr Perry was convicted in Israel of a number of offences in relation to a pension scheme that he had operated in Israel. On 19 February 2008 he was sentenced to 12 years imprisonment and fined the equivalent of approximately £3m. He has paid that fine. Two subsequent appeals had limited success inasmuch as they resulted in a reduction of his sentence to 10 years imprisonment and a reduction in the finding of the amount that he had stolen.

5

In or about May 2008 Hoare's Bank in London disclosed to SOCA that Mr Perry, Tamar and Yael had accounts there. Subsequently SOCA discovered that Mr Perry had accounts in London in the Bank J Safra (Gibraltar) Ltd. The total in these various accounts amounted to approximately £14m.

6

On 8 August 2008 SOCA obtained a disclosure order from HH Judge Kay QC, sitting as a Deputy High Court Judge, on a paper application without notice. Notices under that order addressed to the DO appellants, all of whom were at all material times outside the jurisdiction, were communicated to them by letter addressed to a residence that Mr Perry maintains in Mayfair.

7

On 28 October 2009 SOCA obtained a worldwide property freezing order from Cranston J on an application without notice against eight respondents, including the appellants in the PFO appeal. So far as Mrs Perry was concerned, the order froze certain identified assets, but it froze worldwide all the assets of the other defendants. The order also required all the defendants to disclose all their worldwide assets.

The hearings below
8

The PFO appellants sought an order from Mitting J varying the property freezing order so as, inter alia, to exclude from its ambit property that was located outside England and Wales and to limit the disclosure obligations under the order to assets located within England and Wales. In a judgment dated 28 June 2010 [2010] EWHC 1711 (Admin); [2010] 1 WLR 2761 Mitting J varied some of the disclosure obligations but otherwise rejected the application. Mitting J's judgment was admirably clear and concise. He started with a presumption against giving the relevant provisions of POCA extraterritorial effect, but concluded that, with the exception of section 286, which applied only to an order made in Scotland, the language of the relevant provisions so clearly applied to property outside the jurisdiction that it displaced this presumption.

9

The appellants' appeal to the Court of Appeal was heard on 8 and 9 December 2010 and judgment was delivered on 18 May 2011 [2011] EWCA Civ 578; [2011] 1 WLR 2817. The lengthy lead judgment of Hooper LJ was a reflection not only of the complexities of POCA but of the very detailed submissions advanced by Mr Philip Jones QC for the appellants, which were summarised at some length by the Lord Justice. Among many other arguments Mr Jones relied on the presumption against extraterritoriality. A civil recovery order vests property in a "trustee for civil recovery". Mr Jones submitted that such an order took effect in rem. He submitted that it would be a breach of international law for the English Court to make an order in rem in respect of property in a foreign jurisdiction, the more so if that property was real property. Hooper LJ rejected this argument. He held that a civil recovery order operated in personam against the holder of the property. The effect, if any, of a civil recovery order in relation to property in a foreign jurisdiction would depend upon the law applied in that jurisdiction and, in those circumstances, there was nothing untoward in making such an order. Like Mitting J, Hooper LJ concluded that the clear meaning of the relevant provisions was that a civil recovery order could be made in respect of property wherever in the world the property was located, and there was no reason not to give effect to the natural meaning of the language. Like Mitting J, Hooper LJ concluded that section 286 made an exception in the case of an order made in Scotland. Hooper LJ derived support for his conclusions from analogies with the law of bankruptcy and from the practice of issuing worldwide freezing orders.

10

In a shorter judgment Tomlinson LJ concurred both with the result reached by Hooper LJ and with his reasoning. Maurice Kay LJ agreed with both judgments.

11

It is common ground that, on its face, section 286 makes provision in respect of the scope of a recovery order that distinguishes the position in Scotland from that in the rest of the United Kingdom. There is a dispute as to the nature of that distinction and, whatever its nature, no one has yet been able to suggest an explanation for it.

A summary of my conclusions
12

Because of the complexity of the subject matter of this appeal I propose to follow the example of Hooper LJ by summarising my conclusions at the outset.

(i) The courts below placed undue weight on the definition of "property" in POCA.

(ii) The appellants have placed undue weight on the presumption that a statute does not have extraterritorial effect.

(iii) States have, by agreement, departed from the customary principles of international law in the case of confiscating the proceeds of crime. Of particular relevance is the 1990 Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime ("the Strasbourg Convention"). POCA must be read in the light of that Convention.

(iv) The Convention recognises that the courts of state A may make an order purporting to vest in the authorities of state A property that is situated in state B in circumstances where the property is the proceeds of the criminal conduct of a defendant subject to the criminal jurisdiction of state A.

(v) The Convention provides that effect should be given to such an order by confiscation proceedings in state B at the request of state A.

(vi) The answer to the issue raised by the PFO appeal depends upon an analysis of both the scheme and the language of POCA considered in the light of the Convention.

(vii) Parts 2, 3 and 4 of POCA provide for (a) the imposition in personam of obligations in respect of property worldwide; (b) measures in rem to secure and realise property within the United Kingdom; and (c) requests to be made to other states to take such measures in respect of property within their territories.

(viii) Part 5 of POCA makes provision for in rem proceedings in respect of property within the United Kingdom but not outside it.

(ix) The scheme of POCA, as described above, accords with...

To continue reading

Request your trial
36 cases
  • R KBR Inc. v The Director of the Serious Fraud Office
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 6 September 2018
    ...arrangements. 53 (6) POCA: In the context of the Proceeds of Crime Act 2002 (“ POCA”), we were referred to SOCA v Perry (Nos 1 and 2) [2012] UKSC 35; [2013] 1 AC 182. Mr Perry (“P”) was convicted in Israel of fraud offences relating to a pension scheme he had operated there. SOCA commenced ......
  • R (on the application of KBR, Inc.) v Director of the Serious Fraud Office
    • United Kingdom
    • Supreme Court
    • 1 January 2021
    ...Co Ltd, In re [1993] Ch 345; [1993] 2 WLR 872; [1993] 2 All ER 980; [1993] BCLC 1139, CASerious Organised Crime Agency v Perry [2012] UKSC 35; [2013] 1 AC 182; [2012] 3 WLR 379; [2012] 4 All ER 795; [2013] 1 Cr App R 6, SC(E)The following additional case was cited in argument:AWH Fund Ltd v......
  • R Tony Michael Jimenez v The First Tier Tribunal (Tax Chamber) (First Respondent) HM Commissioners for Revenue and Customs (Second Respondent)
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 20 October 2017
    ...Court relating to disclosure notices given pursuant to an order made under the Proceeds of Crime Act 2002 ( POCA), namely Perry v SOCA [2012] 4 All ER 795. 3 The Revenue complained about the recitation by the Claimant as facts that he was resident in Cyprus for much of the period to which t......
  • R Tony Michael Jimenez v The First Tier Tribunal (Tax Chamber)
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 31 January 2019
    ...at page 819A-B. This principle can be seen in operation in the decision of the Supreme Court in Serious Organised Crime Agency v Perry [2013] 1 AC 182 where SOCA commenced proceedings against Mr Perry and members of his family for a civil recovery order under Part 5 of the Proceeds of Crime......
  • Request a trial to view additional results
4 firm's commentaries
  • Compulsory Document Production Powers In Criminal Investigations – Do They Have Extraterritorial Effect?
    • United Kingdom
    • Mondaq UK
    • 24 October 2017
    ...to secure its enforcement in other jurisdictions.11 Now consider an in rem order. In Perry and others v Serious Organised Crime Agency [2012] UKSC 35, the Supreme Court examined the jurisdictional scope of SOCA's (now the NCA's) powers under Part 5 of POCA 2002 to make property freezing ord......
  • A Defining Moment: Supreme Court Rules On The Territorial Scope Of Powers Under POCA
    • United Kingdom
    • Mondaq United Kingdom
    • 6 August 2012
    ...the UK in limited circumstances, although this was not finally decided and may result in Parliamentary correction. Perry & Ors v SOCA [2012] UKSC 35 A full copy of the judgment is available This article was written for Law-Now, CMS Cameron McKenna's free online information service. To r......
  • SFO’s International Investigatory Powers Curbed in Supreme Court Ruling
    • United Kingdom
    • LexBlog United Kingdom
    • 12 February 2021
    ...to have been enacted for different purposes and in different contexts. However, the decision in Serious Organised Crime Agency v Perry [2012] UKSC 35 was of assistance, as it contained similar provisions for requesting information from “any person” in relation to criminal investigations. In......
  • UK Settlement Highlights International Enforcement Linked to “Car Wash” Investigation
    • United Kingdom
    • JD Supra United Kingdom
    • 16 November 2020
    ...3 [2020] EWHC 1849 (Admin) - https://www.bailii.org/ew/cases/EWHC/Admin/2020/1849.html 4 Ibid. 5 [2012] UKSC 35 6 [2020] EWHC 1849 (Admin) - 7 https://www.sfo.gov.uk/download/sfo-v-faerman-signed-order/ 8 https://www.sfo.gov.uk/2017/01/17/sfo-completes-497-25m-deferred-prosecution-agreement......
3 books & journal articles
  • The civil law: a potent crime-fighting device
    • United Kingdom
    • Journal of Money Laundering Control No. 17-1, January 2014
    • 7 January 2014
    ...civil law provides a stronger deterrent toengaging in criminality than the criminal law itself.JMLC17,114 Notes1. Perry et aux v. SOCA [2012] UKSC 35.2. Section 57.3. Sections 61-66 POCA.4. Director of Assets Recovery Agency v. Green [2005] EWHC 3168 (admin).5. The Director of Assets Recove......
  • Customer due diligence (CDD) mandate and the propensity of its application as a global AML paradigm
    • United Kingdom
    • Journal of Money Laundering Control No. 17-1, January 2014
    • 7 January 2014
    ...This is underpinned by Recommendation 15 of the FATF 40 Recommendations 1989.17. Perry and others v. Serious Organised Crime Agency [2012] UKSC 35.18. Perry and others (n 43).19. Goldby (n 57).20. Recommendations 14-21 of revised FATF (2003) address the need for banks to operate in asecure ......
  • Forfeiting proceeds: Civil forfeiture, the right to property and the Constitution
    • South Africa
    • South African Law Journal No. , May 2021
    • 19 May 2021
    ...dicu lties are avoided by shifti ng 21 Van der Walt op cit note 3 at 9–10. 22 See for ex ample Perr y v Serious O rganised Crime Age ncy [2012] UKSC 35 (‘Perry’) para 31, describi ng post-conviction con scation as the ‘impo sition of the obligat ion to make a money payment, wh ich is enfo......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT