| CRIME — Restraint order — External request — Judge making order in respect of property both within and outside England and Wales — Whether power to do so — Proceeds of Crime Act 2002, ss 444, 447(4) — Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (SI 2005/3181), art 8(1)(4)
King v Serious Fraud Office [2008] EWCA Crim 530; [2008] WLR (D) 147
CA: Gage LJ, Simon J and Judge Paget QC: 18 March 2008
Arts 6, 7 and 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, read as a whole, provided a scheme to make a restraint order in response to an external request only in respect of property in England and Wales. There was no power to make a restraint order in respect of property outside the jurisdiction.
The Court of Appeal (Criminal Division) so held when allowing an appeal by the appellant, David Cunningham King, against a refusal by Judge Wadsworth QC in the Crown Court at Southwark on 23 April 2007 to discharge a restraint order and a disclosure order made by him on an application without notice by the Serious Fraud Office on 31 May 2006.
GAGE LJ said, in the reserved judgment of the court, that the appellant was a British national by birth but for the last 30 years had been resident in South Africa working as a businessman. The South African authorities had been investigating the appellant’s tax affairs. Criminal proceedings had been instituted by the National Prosecuting Authority of the Republic of South Africa (“the NPA”), charging offences of tax fraud and the contravention of exchange control regulations. In the execution of those fraudulent schemes it was alleged that he had transferred, or arranged to be transferred, his shares in various South African registered companies into the name of Agnes King, his mother, who lived in Scotland, for no consideration or for nominal consideration. Judge Wadsworth QC had made a restraint order and a disclosure order against the appellant on the ex parte application of the Serious Fraud Office (“SFO”) under arts 8(1)(4) of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, pursuant to an external request from the NPA. The orders related to all property held by the appellant, including property held both inside and outside England and Wales. The appellant’s application to discharge the order had been refused by the judge. On the appeal, the appellant submitted that the judge had been wrong to make a restraint order in respect of property located outside England and Wales. S 444 of the Proceeds of Crime Act 2002 provided the power for secondary legislation to be made providing for prohibition on dealing with property which was the subject of an external request. Property was defined in s 447(4) as “all property wherever situated …”. S 447 appeared in Pt 11 of the 2002 Act under the heading “Co-operation”. Pt 11 also made provision for separate enforcement of external requests in different parts of the United Kingdom. The judge had ruled that provided, pursuant to art 7(3), there was relevant property in England and Wales identified in the external request, the court had power to restrain assets outside the jurisdiction as well as within the jurisdiction. He had relied on s 447(4) in support of his conclusion. He had further ruled that art 8 provided the court with power to restrain property not specifically identified in the letter of request and, having reached that conclusion, he had held that the court had power to make a disclosure order. Their Lordships preferred the appellant’s submissions on the meaning and effect of arts 7(3) and 8(1) of the 2005 Order. Art 8(1) stated that the power of the Crown Court to make a restraint order was in respect of relevant property identified in the external request. That could only mean relevant property in England and Wales as identified in the external request: see art 7(3)(a). That did not prevent the requesting state from adding to the property identified in the external request which was not initially specified but the added property could only be property within England and Wales. That construction of art 8 was supported by reference to art 6(7) which provided that relevant property in Scotland or Northern Ireland should be dealt with under a separate part of the Order. Any world-wide restraint order made by a Crown Court in England and Wales would have effect in Scotland and Northern Ireland without the need for the external request to be dealt with by the courts in Scotland and Northern Ireland That construction of arts 7 and 8 was not undermined by the definition of property in s 447(4) of the 2002 Act. The effect of arts 6, 7 and 8, read as a whole, was to provide a scheme to make a restraint order in response to an external request only in respect of property in England and Wales. Both the restraint order and the disclosure order would be quashed. In their place a restraint order prohibiting the appellant from dealing with any property of his in England and Wales would be substituted. In those circumstances there was no basis for making a disclosure order other than in respect of property located in England and Wales.
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