King v The Serious Fraud Office

Under the external-request regime, a Crown Court restraint order may reach only relevant property in England and Wales identified in the request. The reference in section 447 of the Proceeds of Crime Act 2002 to property wherever situated does not confer a worldwide restraint jurisdiction under articles 7 and 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005.

An ancillary disclosure order must observe the same territorial limit. Material non-disclosure on an ex parte application does not automatically require discharge. The court must apply the public-interest test and assess prejudice. Notice requirements for applications to vary restraint orders must be observed.

King v The Serious Fraud Office concerned restraint and disclosure orders made without notice by the Crown Court on an external request from the South African prosecuting authority. The orders restrained the appellant's property worldwide and required disclosure concerning it. The appellant applied unsuccessfully to discharge them.

He appealed against the judge's conclusions that articles 7 and 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 authorised worldwide restraint and disclosure, and against the exercise of discretion despite alleged non-disclosure. The central issue was whether the external-request scheme permitted the Crown Court to make a worldwide restraint order.

1. Appeal allowed in part. The restraint order and disclosure order were quashed. They were replaced by a restraint order limited to the appellant's property in England and Wales. There was no basis for a disclosure order extending beyond property in England and Wales.

2. Articles 7(3)(a) and 8(1) of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 formed a territorial scheme. Article 8(1) authorised restraint only of relevant property identified in the external request. Read with article 7(3)(a), this meant property in England and Wales. The requesting state could add further property, but only property within that territory.

3. The definition in section 447(4) of the Proceeds of Crime Act 2002, which included property wherever situated, did not enlarge the Crown Court's article 8 jurisdiction. Article 7(4) required regard to the statutory definitions when deciding whether the gateway conditions were satisfied. It did not import a worldwide power. Such a power required clear language. Article 6(7), providing separate treatment for property in Scotland and Northern Ireland, reinforced that construction.

4. The judge had correctly directed himself by reference to Jennings v CPS [2004] 4 AER 391. The alleged failures of disclosure concerning the original application did not warrant discharge in the public interest. The respondent should have notified the appellant of the application to vary the restraint order and disclosed the correspondence. Nevertheless, the judge was entitled to find no prejudice and to refuse discharge on that ground. The Court would have reached the same conclusion afresh.

5. In postscript, the Court stressed that the notice requirements in rule 59.4 of the Criminal Procedure Rules must be observed. Important and complex ex parte restraint applications should normally be heard, with a full record, rather than decided solely on paper.

• Court of Appeal (Criminal Division): appeal allowed in part in [2008] EWCA Crim 530 . The worldwide restraint and disclosure orders were quashed and a restraint order limited to property in England and Wales was substituted.
• Crown Court at Southwark: His Honour Judge Wadsworth QC dismissed the appellant's application to discharge restraint and disclosure orders on 23 April 2007.