Serious Fraud Office v A

A restraint order sought without notice requires full and complete disclosure of all material matters. A material non-disclosure may justify discharge, but it does not automatically require it. The court must decide whether the order should stand once the true position is known, having regard both to the public interest and to the nature, explanation and significance of the non-disclosure.

The statutory conditions for an external restraint order do not remove the court’s discretion. The court must assess the competing interests carefully. A judge cannot discharge an order merely because an undisclosed fact might have been relevant. The judge must determine its actual effect and consider the merits of the application.

An Iranian investigating judge requested a restraint order over assets in England and Wales belonging to A, who was alleged to have obtained substantial funds through fraud and corruption connected with an aircraft transaction. The Director of the Serious Fraud Office obtained the order without notice under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005.

Judge Elwen later discharged the order. He held that the original request had failed to disclose that the investigation was proceeding within the military branch of the Iranian judicial organisation. The Director appealed. The central issue was whether that non-disclosure justified immediate discharge without findings on its significance, explanation, or the merits of maintaining the order.

1. Appeal allowed. The order discharging the restraint order was quashed. The application to discharge was remitted to the Crown Court for rehearing. The restraint order remained in force unless and until discharged.
2. A restraint order under Article 7 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 is a serious and potentially burdensome measure. Even where its statutory conditions are met, the court retains a discretion. The statutory scheme does not require an order to follow almost automatically. The court must assess the competing public and private interests with care.
3. Because the original application is ordinarily made without notice, the applicant owes a high duty of full and complete disclosure. A non-disclosure can justify discharge only if it is material, meaning that it could have affected the original decision. Even then, discharge is discretionary. The court must decide whether the public interest requires the order to stand now that the true position is known. Whether the failure was deliberate or accidental is material but not conclusive. The authorities, including Brink’s Mat v Elcombe [1988] 1WLR 1350 and Jennings v CPS [2005] EWCA Civ 746, did not make discharge an automatic disciplinary sanction.
4. The Crown Court judge had not found deliberate deception. Nor had he determined the significance of the military-court framework, whether the investigating judge’s explanation could be accepted, or whether the restraint order should stand on its merits. Treating the undisclosed fact as relevant did not answer those questions. The judge therefore misdirected himself by ordering immediate discharge without those assessments.
5. The Court of Appeal left open whether, and in what circumstances, alleged unfairness in the requesting state’s investigation or procedures could engage the Soering principle or affect the statutory reasonable-cause conditions. That issue required full argument and findings. The remittal also permitted consideration of the further issues left unresolved below, including the new sanctions contention.

1. Court of Appeal (Criminal Division) Allowed the Director’s appeal in [2007] EWCA Crim 1927, quashed the discharge order and remitted the application to discharge the restraint order.
2. Southwark Crown Court Judge Elwen had made the restraint order without notice on 22 June 2006, then discharged it after a hearing on 5 December 2006 because of alleged material non-disclosure.