National Crime Agency v Ayodele Odewale & Anor.

When deciding whether to exclude property frozen under a property freezing order to meet living expenses, the court must determine what expenses are reasonably necessary and whether the applicant has other available assets. Those assets may belong to the applicant or to a third party if they are available for use. Specific grounds for suspecting undisclosed assets may justify resolving evidential doubt against the applicant. The applicant does not bear an absolute burden of proving the absence of other assets. Any exclusion must avoid undue prejudice to the recovery of property obtained through unlawful conduct and must accommodate relevant Article 8 rights. A claimant’s previous lifestyle does not establish the level of expenses that may properly be funded from frozen property.

The National Crime Agency brought civil recovery proceedings under section 243 of the Proceeds of Crime Act 2002 against Ayodele Odewale and Sara Yadav. A property freezing order had been made over bank accounts and valuable watches. Ms Yadav applied under section 245C(3)(a) for a variation permitting her to meet rent and her children’s school fees.

The parties accepted that the principles stated by the Court of Appeal in Serious Organised Crime Agency v Azam [2013] 1 WLR 38 applied to living expenses as well as legal expenses. The central issues were the proper level of expenses, the significance of assets held by or available through others, and whether the evidence established grounds for suspecting undisclosed assets.

1. The application was dismissed. The court applied the principles in Serious Organised Crime Agency v Azam [2013] 1 WLR 38 to an application for living expenses.

2. The court assessed the expenses by reference to what was reasonably necessary to maintain a standard of living commensurate with Ms Yadav’s income and stated lack of savings, consistently with her and her children’s Article 8 rights. She was not entitled to preserve an expensive lifestyle merely because it had previously been funded from suspected proceeds of crime.

3. Private school fees were generally a luxury rather than a necessary living expense. Nevertheless, the children could remain at their schools until the end of the current academic year because moving them during the school year would infringe their Article 8 rights and the NCA had agreed to fund the autumn term.

4. The court accepted that available assets belonging to a third party could be relevant under both limbs of the Azam approach. The focus was whether assets were available to meet the expenses in preference to property subject to the freezing order. The wording of the two limbs was not intended to create a distinction in principle.

5. There were very strong grounds for suspecting that Mr Odewale had substantial undisclosed assets. The evidence included statements about being a comfortable millionaire, unexplained expenditure and travel, an apparently false address, and limited responses to the claimant’s evidence. The court therefore concluded that assets were likely to be available to Ms Yadav and dismissed the application.

First-instance application to vary a property freezing order. The judgment does not state any subsequent appellate history.