Perry & Ors v Serious Organised Crime Agency (Rev 1)

Part 5 of the Proceeds of Crime Act 2002 permits a recovery order concerning recoverable property situated outside England and Wales, whether moveable or immoveable. The statutory definition of property includes property wherever situated. Vesting in the trustee for civil recovery gives effect to the order, but its practical consequences depend on the law of the place where the property is situated. The trustee has a personal right against the respondent and such further rights as local law provides. Part 5 therefore has a limited extra-territorial effect, without altering foreign law or title. Statutory omissions and the presumption against extra-territoriality do not overcome the clear language of the Act.

The appellants challenged a worldwide property freezing order obtained by the Serious Organised Crime Agency under Part 5 of the Proceeds of Crime Act 2002. They argued that the Administrative Court lacked power to make a recovery order concerning property outside England and Wales.

Mitting J rejected the argument and declined to remove the foreign property from the freezing order: [2010] EWHC 1711 (Admin). The appeal concerned the extra-territorial scope of Part 5 and the legal effect of vesting foreign property in the trustee for civil recovery.

1. Appeal dismissed. The Court of Appeal unanimously held that Part 5 of the Proceeds of Crime Act 2002 authorises a recovery order for recoverable property outside England and Wales, whether moveable or immoveable. Section 316(4), defining property as all property wherever situated, admits of no narrower construction. Section 243(2), permitting service wherever the respondent is domiciled, resident or present, and section 286, dealing expressly with certain Scottish orders concerning property outside Scotland, reinforce that conclusion.
2. A recovery order vests the recoverable property in the trustee for civil recovery, but the consequences of vesting depend on the law of the situs. In England and Wales, domestic law may give the trustee legal and equitable ownership. In relation to foreign property, the order gives the trustee a personal right against the respondent and such further rights as the local law provides. It does not itself change a foreign register of title or confer rights against third parties abroad.
3. The court rejected arguments based on legislative omissions, including the absence of a Part 5 equivalent to section 74 and the absence of express provisions concerning foreign equivalents of domestic bodies and insolvency procedures. Section 269(1) was construed as applying to provisions of English law, not to foreign law governing property abroad.
4. The presumption against extra-territoriality was overcome by the clear statutory language. Part 5 creates a limited extra-territorial scheme. A recovery order is a statutory mechanism for recovery rather than, of itself, a judicial determination of foreign proprietary rights. The trustee’s ability to realise foreign property depends on remedies available under local law.
5. Tomlinson LJ emphasised that civil recovery under Part 5 is distinct from criminal confiscation under Part 2. Maurice Kay LJ agreed with both judgments.

• Court of Appeal (Civil Division): Appeal dismissed on 18 May 2011.
• High Court of Justice, Queen’s Bench Division, Administrative Court: Mitting J rejected the challenge to Part 5’s extra-territorial scope and declined to vary the freezing order: [2010] EWHC 1711 (Admin) .