Director of the Assets Recovery Agency v Szepietowski & Ors

Information discovered by an interim receiver while executing an interim receiving order may be used in a later application concerning different unlawful conduct, unless the original order restricts its use. The absence of express statutory provision on the point does not create an implied prohibition. Such use is consistent with the civil recovery purposes of the Proceeds of Crime Act 2002 and avoids conferring immunity in respect of property obtained through unlawful conduct. The common-law approach to material discovered under a search warrant, and the reasoning in L.T. Piver Sarl v S. & J Perfume Co Ltd, support that conclusion. Whether prior court permission is required before using the information remains undecided where the issue is not contested.

The Director of the Assets Recovery Agency obtained a first interim receiving order against John Szepietowski and related parties. During the interim receiver’s work, information emerged concerning alleged unlawful conduct different from that supporting the first order. The Director then obtained a second interim receiving order concerning different companies and property.

Mr Szepietowski sought discharge of the second order. Most grounds, including alleged non-disclosure, the status of property as realisable property and delay in serving a claim form, were adjourned. The remaining issue was whether information obtained under the first order could be used in support of the second order. The defendant ultimately conceded that the second order had not been granted on improperly obtained evidence.

1. Declaration granted. The Director and the interim receiver were entitled to use, in the application for the second interim receiving order, information discovered through the first order which related to different alleged wrongdoing.
2. Sections 247(2)(b) and 255(1)(c) of the Proceeds of Crime Act 2002 expressly refer to recoverable or associated property in relation to the same unlawful conduct. Those provisions regulate the interim receiver’s duties under the order. They do not prohibit the use of information concerning different unlawful conduct.
3. The statutory scheme is directed to enabling recovery of property obtained through unlawful conduct. Preventing the use of relevant information discovered during the first receivership would undermine that purpose and create a serious loophole, potentially giving a wrongdoer immunity in respect of other unlawfully obtained property.
4. The common law provides supporting analogy. In Chic Fashions (West Wales) Ltd v Jones, material discovered under a search warrant could include other goods reasonably believed to be stolen or relevant evidence. The reasoning in L.T. Piver Sarl v S. & J Perfume Co Ltd likewise supported reporting an apparent infringement discovered during an inspection under an Anton Piller order.
5. It was unnecessary to decide whether the Director or interim receiver had to obtain the court’s permission before using such information. The defendant accepted the entitlement to rely on it, and the issue would require detailed submissions at a contested hearing.