King (Respondent) v Director of the Serious Fraud Office (Appellant) (On Appeal from the Court of Appeal Criminal Division)

Under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, the Crown Court may restrain only property situated in England and Wales when acting upon an external request. Identification of property within the jurisdiction is not merely a gateway to worldwide restraint powers.

The statutory definition of property as all property wherever situated remains subject to context. It does not enlarge provisions which expressly or impliedly concern property in England and Wales. An ancillary disclosure order must serve the effectiveness of the lawful restraint order. It cannot require worldwide asset disclosure where the restraint itself is territorially confined.

South African prosecutors charged the respondent with extensive financial offences and requested assistance in preserving assets for a prospective confiscation order. Acting without notice, the Crown Court made a restraint order covering assets within and outside England and Wales. It also required disclosure of assets wherever situated.

The Crown Court later refused to discharge the orders. The Court of Appeal allowed the respondent's appeal to the extent of restricting them to property in England and Wales: [2008] EWCA Crim 530; [2008] 1 WLR 2634. The Director of the Serious Fraud Office appealed.

The central issue was whether the Crown Court had jurisdiction under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 to include property outside England and Wales in the restraint and disclosure orders.

1. Appeal dismissed unanimously. Lord Phillips delivered the leading opinion. Lord Scott, Lord Walker, Lord Brown and Lord Mance agreed with his reasons and conclusion.

2. Per Lord Phillips, the natural meaning of articles 6, 7 and 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 establishes a territorially confined scheme. Jurisdiction depends upon an external request concerning relevant property in England or Wales. The property must be identified in the request, and the restraint order may prohibit dealings with that identified property. The presence of property in England and Wales is not merely a gateway to worldwide jurisdiction.

3. The surrounding provisions confirmed that construction. Articles 12, 16, 18, 27 and 28 provide machinery for seizure, receivership and enforcement directed to property within England and Wales. The Order supplies no machinery for exercising those powers abroad. Its territorial division between England and Wales, Scotland and Northern Ireland further supports the same conclusion.

4. The definition in section 447(4) of the Proceeds of Crime Act 2002, under which property means all property wherever situated, must be read contextually. Where the Order expressly or impliedly refers to property in England and Wales, the definition cannot extend the provision to property elsewhere. The distinct mechanism in section 74 for requesting overseas assistance in domestic cases also indicated that equivalent machinery would have been provided had worldwide external restraint been intended.

5. The international conventions and earlier statutory regimes did not displace the Order's clear language. Worldwide orders could also generate overlapping requests, duplication and conflict between states. The explanatory memorandum was not a legitimate aid to construing the enacted language, although it answered the suggestion that territorial restriction would be extraordinary.

6. Article 8(4) permits only ancillary orders appropriate to ensure the effectiveness of a valid restraint order. Because the restraint order was confined to property in England and Wales, there was no justification for a worldwide disclosure order. The Court of Appeal's territorial restriction of both orders was upheld.

1. House of Lords: The Director's appeal was dismissed unanimously. The territorial restriction imposed by the Court of Appeal was upheld: [2009] UKHL 17.
2. Court of Appeal (Criminal Division): The respondent's appeal was allowed to the extent that an order confined to property in England and Wales was substituted: [2008] EWCA Crim 530; [2008] 1 WLR 2634.
3. Crown Court at Southwark: Judge Wadsworth QC made worldwide restraint and disclosure orders without notice. He later refused the respondent's application to discharge them, treating the identification of property in England and Wales as a gateway to worldwide jurisdiction.