Serious Organised Crime Agency, R (On the Application Of) v Wang & Anor

For civil recovery under Part V of the Proceeds of Crime Act 2002, the enforcement authority must identify conduct of an identifiable unlawful kind and prove, on the balance of probabilities, that the property was obtained by or in return for that conduct. It need not prove a specific criminal offence or trace each item of property to a particular transaction. The court may draw an inference from the totality of the evidence, including unexplained wealth and the absence of a credible explanation, although lack of identifiable lawful income alone is insufficient. Where the court is satisfied that property is recoverable, it must make a recovery order.

The Serious Organised Crime Agency applied under Part V of the Proceeds of Crime Act 2002 for civil recovery orders concerning four properties and balances in twelve bank accounts held by, or associated with, Lu Wang and Chuan Cheung Wu. The alleged unlawful conduct comprised brothel keeping, permitting premises to be used for prostitution-related purposes, and money laundering.

The respondents could not be located, did not attend, and did not respond to the proceedings. The central issues were whether service was adequate, whether the alleged unlawful conduct was proved on the balance of probabilities, and whether the properties and funds were recoverable property.

1. Service and statutory test. Service by the ordered alternative methods was adequate. Under sections 240(1), 241(1) and 241(3)(a) of the Proceeds of Crime Act 2002, SOCA had to identify matters constituting an identifiable kind, or kinds, of unlawful conduct and prove on the balance of probabilities that the property was obtained by or in return for that conduct. Proof of a specific criminal offence was unnecessary.

2. The court adopted the approach in R (Director of Assets Recovery Agency and Others) v Green [2005] EWHC 3168 as to identifying the unlawful conduct. The more restrictive aspect of that approach concerning unexplained lifestyle evidence was not followed. Consistently with Serious Organised Crime Agency v Gale [2009] EWHC 1015 (QB), the absence of an explanation, or an untruthful deliberate explanation, could support an inference of unlawful origin, but could not alone sustain the claim.

3. The court applied the approach reflected in Director of the Assets Recovery Agency v Jackson [2007] EWHC 2553 (QB) and Director of Assets Recovery Agency v Oliputan [2007] EWHC 162 (QB). It was permissible to consider the totality of the evidence and infer that significant property derived from specified unlawful conduct without tracing each property or deposit individually. This was particularly appropriate where funds from different wrongful activities had been intermixed.

4. The evidence of brothel-keeping activities, related advertisements and transactions, the respondents’ involvement, the unexplained deposits and property purchases, and the absence of any challenge established unlawful conduct and the unlawful origin of the assets. Sections 304, 305 and 307 of the Act treated property obtained through unlawful conduct, property representing it, followed property and profits as recoverable property. Under section 266(1), once satisfied that property was recoverable, the court was required to make a recovery order.

5. Recovery orders were therefore made in respect of the four specified properties and the relevant bank-account balances, subject to an undertaking concerning a further witness statement and liberty to apply for three months from service of the order.

First-instance decision in the Administrative Court. The judgment does not state any prior appellate decision in the same proceedings.