Serious Organised Crime Agency v Perry

The Supreme Court considered the territorial scope of the civil recovery regime in Part 5 of the Proceeds of Crime Act 2002 and the scope of disclosure powers under Part 8. The majority held that, read in its statutory and international context (notably the Strasbourg Convention), Part 5 recovery orders made by the High Court cannot operate to vest or to secure property situated outside England and Wales; consequently a worldwide property freezing order under section 245A was beyond the court's jurisdiction and must be restricted to property within the court's territorial jurisdiction. The Court also held that disclosure orders under section 357 cannot authorise SOCA to issue penal information notices to persons who are outside the United Kingdom. The decision turned on the structure and language of POCA, the international co‑operation framework, the presumption against extraterritoriality and the anomalous effect of section 286 in relation to Scotland.

This pair of consolidated appeals arose from SOCA's attempts to preserve and recover property believed to be the proceeds of criminality connected with Mr Perry. Two preliminary steps were in issue: (i) a worldwide property freezing order obtained under section 245A of POCA (the PFO appeal) and (ii) information notices issued under a disclosure order made under Part 8 (the DO appeal).

Procedural history: The High Court (Mitting J) refused to limit the PFO save for some disclosure obligations; the Court of Appeal (Hooper, Tomlinson and Maurice Kay LJJ) upheld the order in relation to extraterritorial effect but the Court of Appeal was divided on the disclosure point. The appeals came to the Supreme Court from the Court of Appeal ([2010] EWCA Civ 907; [2011] EWCA Civ 578).

Nature of the applications: SOCA sought (a) a property freezing order covering property worldwide to protect assets it contended could be made the subject of civil recovery under Part 5, and (b) compelling disclosure by information notices under a disclosure order to persons who SOCA knew to be outside the United Kingdom.

Issues framed by the Court:

• Whether Part 5 of POCA permits the High Court in England and Wales to make recovery orders (and related interim orders) in respect of property situated outside England and Wales;
• Whether the definition of "property" in section 316(4) and other textual provisions displace the presumption against extraterritoriality;
• The relevance of international instruments (in particular the 1990 Strasbourg Convention) and the scheme for external requests and orders (section 444 and the 2005 Order);
• Whether a disclosure order under section 357 may authorise service of penal information notices on persons outside the United Kingdom.

Court's reasoning (concise): The majority analysed POCA as a coherent domestic and international scheme. Parts 2–4 (criminal confiscation) impose in personam liability calculated with regard to worldwide property but rely on measures and mutual‑assistance mechanisms (section 74 and the External Requests Order) to secure and realise property abroad. Part 5, by contrast, is principally a domestic in rem civil recovery regime intended to operate where the property is within the territorial jurisdiction of the court; many Part 5 mechanisms (registration of orders in relation to land, appointment and powers of the trustee for civil recovery, rules about realisation and application of proceeds) sensibly operate only in respect of property within the relevant part of the United Kingdom. The definition "property is all property wherever situated" must be read in context: it has limited roles in tracing and in describing property that "represents" proceeds obtained abroad, but it does not, save for the puzzling section 286 (a provision affecting the Court of Session), give Part 5 an unprecedented worldwide in personam reach. The Strasbourg Convention envisages foreign co‑operation by enforcement in the lex situs or by enforcement of foreign confiscation orders; it does not justify the novel worldwide in personam jurisdiction which SOCA advocated. For the disclosure order, the Court held that conferring penal obligations to comply with information notices on persons outside the United Kingdom would be a startling extraterritorial exercise of power and is not authorised by Part 8.

Result: By majority the PFO appeal was allowed (the worldwide freezing order could not validly extend to property outside England and Wales) and the DO appeal was allowed (the disclosure order did not authorise information notices to persons outside the United Kingdom). The judgments explain the anomalous character of section 286 and the limited relevance of the section to the High Court's powers in England and Wales. A minority (Lords Judge and Clarke) would have upheld the PFO but agreed on the DO point.

Appeal allowed. The Supreme Court (majority) held that Part 5 of the Proceeds of Crime Act 2002 does not give the High Court in England and Wales jurisdiction to make recovery orders or ancillary interim orders in respect of property situated outside England and Wales; accordingly the worldwide property freezing order exceeded jurisdiction and must be limited to property within the court's territorial jurisdiction. The Court further held that disclosure orders under Part 8 do not authorise SOCA to issue penal information notices to persons who are outside the United Kingdom. The decision rested on the scheme and language of POCA read in the light of international co‑operation instruments (notably the Strasbourg Convention), the presumption against extraterritoriality and the anomalous character of section 286.

Appeals to the Supreme Court from the Court of Appeal decisions in the related matters ([2010] EWCA Civ 907; [2011] EWCA Civ 578), itself an appeal from the High Court (Administrative Court) decision ([2010] EWHC 1711 (Admin)).