Olden v Serious Organised Crime Agency

Under Part 5 of the Proceeds of Crime Act 2002, civil recovery is independent of criminal prosecution. Evidence excluded from a criminal trial because it was unlawfully obtained is not thereby inadmissible in civil recovery proceedings. The civil court must exercise its own discretion under the Civil Procedure Rules 1998, balancing the unlawfulness against fairness and the need to decide the case on the available evidence.

Property acquired through unlawful conduct, and profits from its use, are recoverable. Spread-betting winnings funded by recoverable property may be recovered as traced property or as profits accruing in respect of it. A recovery order vests property in the trustee, but does not authorise SOCA itself to obtain possession. The trustee must seek possession under CPR Part 55.

SOCA obtained a recovery order under Part 5 of the Proceeds of Crime Act 2002 in respect of properties, bank balances, vehicles and a caravan said to represent the proceeds of Mr Olden’s mortgage frauds and related deceptions. Holroyde J also later made possession orders in SOCA’s favour.

Mr Olden appealed. His criminal convictions had previously been set aside because his arrest was unlawful and consequential evidence had been wrongly admitted. He argued that the same evidence should have been excluded from the civil proceedings. He also challenged the treatment of an initial £12,000, spread-betting winnings, and the jurisdiction to make possession orders.

The central issues were the admissibility and recoverability questions under the 2002 Act, and whether possession could be ordered in SOCA’s favour following a recovery order.

1. Appeal allowed in part. The recovery order was upheld. The possession order of 31 March 2009 was set aside. Sir Scott Baker gave the judgment, with which Rix and Wilson LJJ agreed.

2. Part 5 of the Proceeds of Crime Act 2002 creates a civil recovery regime which operates independently of criminal proceedings. It expressly permits recovery in relation to property whether or not criminal proceedings have been brought. A criminal ruling excluding evidence governed admissibility in that criminal trial. It did not bind the High Court in the distinct civil proceedings.

3. The High Court had to exercise its own discretion under CPR 32.1(2), consistently with Article 6 and the overriding objective. The relevant consideration was the unlawfulness and circumstances of obtaining the evidence, not the bare fact that a criminal court had excluded it. The judge was entitled to admit it. There was no abuse of process, particularly as the arresting officer’s lack of personal knowledge was the sole defect and there were reasonable grounds to suspect the appellant.

4. SOCA did not have to identify a particular criminal offence as the source of the initial £12,000, provided that it specified the alleged kind of unlawful conduct. The judge’s finding that the money probably came from other deceptions was open to him. No untainted money had been shown to have entered the property transactions. The alternative argument about money withheld from a bankruptcy trustee did not assist the appellant; property acquired by failing to deliver up that money would in any event have the necessary causal connection with unlawful conduct.

5. Winnings from spread betting funded by recoverable deposits were recoverable. They either represented the original recoverable property under section 305 or were profits accruing in respect of it under section 307. Personal skill or effort in predicting market movements was not innocent property for the mixed-property provisions.

6. A recovery order vested the assets in the trustee for civil recovery. The Act did not expressly or impliedly permit SOCA to obtain a possession order in its own favour. Once vesting occurred, the trustee had to decide whether to seek possession and, if so, bring proceedings under CPR Part 55. Inherent jurisdiction could not be used to avoid that procedure and its safeguards.

• Court of Appeal (Civil Division): Allowed the appeal only as to possession and set aside the order of 31 March 2009; otherwise upheld the recovery order: [2010] EWCA Civ 143.
• High Court, Queen’s Bench Division (Holroyde J): On 25 March 2009 made a recovery order under Part 5 of the Proceeds of Crime Act 2002. On 31 March 2009 made ancillary possession orders in SOCA’s favour.