The Director of Public Prosecutions v The Estate of Mildred Edwards (Deceased) & Anor

Applications to exclude funds from a property freezing order for legal expenses require a fact-sensitive assessment of the order’s breadth and the availability of other assets.

Where a freezing order under the Proceeds of Crime Act 2002 attaches only to specific identified assets, the court applies the approach in The Serious Organised Crime Agency v Amir Azam. It asks whether other assets are available, regardless of ownership. If the evidence leaves the court in doubt but gives specific grounds for suspecting undisclosed assets, the doubt may be resolved against the applicant. The ultimate question remains whether permitting use of the frozen funds is just.

The Director of Public Prosecutions obtained a property freezing order against the respondents’ properties and funds connected with their sale. The second respondent applied to vary the order so that £28,555.50 could be used for legal costs incurred in challenging the freezing order and the proposed civil recovery proceedings.

The DPP relied on evidence indicating unexplained transfers to accounts in Thailand and to persons connected with the second respondent. The second respondent relied on evidence concerning his assets, supplemented by explanations given through his solicitors. The central issue was whether the evidence established that no other funds were available and whether it was just to permit access to funds subject to the order.

1. Application refused. The court refused the requested exclusion for legal expenses.
2. The authorities concerning proprietary freezing orders and those concerning property freezing orders under the Proceeds of Crime Act 2002 share some features but apply in materially different contexts. The distinction depends on the substance and breadth of the freezing order, rather than merely the formal type of proceedings. A limited order attaching to specific identified assets may leave a working possibility that other assets remain available.
3. The applicable approach was that stated in The Serious Organised Crime Agency v Amir Azam [2013] EWCA Civ 970. First, the applicant must show that, in all the circumstances, it is just to permit use of funds subject to the order. Secondly, if other available assets may be used, the frozen assets should not be released. Thirdly, where the court is not satisfied that other assets exist, it must assess the likelihood on the evidence. Specific grounds for suspecting undisclosed assets may justify resolving doubt against the applicant.
4. The second respondent had not shown that no other funds were available. The documentary evidence was inconsistent with his account of transfers through Wise. The evidence identified substantial transfers to his own Thai account and to his partner’s daughter. Those sums were unexplained and were inferred to remain available to him. Explanations supplied only through solicitors’ submissions could not adequately answer the evidential deficiencies.
5. Even if the court had remained in doubt, the unexplained inconsistencies and absence of evidence provided specific grounds for suspicion within the third stage of the Azam approach. Permitting use of the frozen funds would probably work an injustice to the DPP.

First-instance application to vary a property freezing order. The application was refused by the High Court.