Fraud – Disclosure orders – Jurisdiction – Realisable property

King v Director of the Serious Fraud Office: HL (Lords Phillips of Worth Matravers, Scott of Foscote, Walker of Gestingthorpe, Brown of Eaton-under-Heywood, Mance): 18 March 2009

The appellant director of the Serious Fraud Office appealed against a decision (King v Serious Fraud Office [2008] EWCA Crim 530, [2009] 1 WLR 2634) that the effect of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 was to provide a scheme for the making of external restraint orders that were restricted to England and Wales.

The respondent (K) was a British subject resident in South Africa who had been charged with fraud by South African prosecutors. The prosecutors sent a letter of request to the director asking for assistance in obtaining orders under articles 6, 7 and 8 of the order, restraining K from dealing with property within the court’s jurisdiction and requiring him to disclose the full extent of his assets. The Crown Court made orders pursuant to the letter restraining K from dealing with any property, whether inside or outside England and Wales, and requiring him to disclose all his assets wherever located. The Court of Appeal allowed K’s appeal to the extent of substituting orders that related only to property within England and Wales. The director argued that the requirement in article 6 that the external request should concern relevant property in England and Wales was a gateway that gave access to a worldwide jurisdiction.

Held: (1) The relevant provisions of the order had a clear meaning. The object of a restraint order was to preserve relevant property that might be needed to satisfy an order for the recovery of specified property or a specified sum of money. Jurisdiction to make an external restraint order only arose, under article 6 of the order, where the external request concerned relevant property in England and Wales. The Crown Court could then make a restraint order prohibiting dealing with the relevant property under article 8. Those provisions were echoed by those which related to enforcing an external order: under article 18, the order had to concern relevant property in England and Wales; enforcement took place by appointment of a receiver, and the powers that article 28 permitted the court to confer on the receiver included powers that were expressly to be exercised within the jurisdiction. The provisions amounted to a clear and coherent scheme: the powers conferred by that part of the order that related to England and Wales could only be exercised in relation to property in England and Wales, and no machinery was provided for exercise of those powers outside England and Wales. Had it been intended that external restraint orders should take effect outside the jurisdiction, the order would have made provisions similar to that in section 74 of the Proceeds of Crime Act 2002. There was no logic in the director’s proposition: there was no reason why the existence of K’s property in England and Wales should justify a request from South Africa to attempt to procure a worldwide restraint on his property. Although the definition of property in section 447 of the act included ‘all property wherever situated’, that had to depend on the context in which the word was used: where the order expressly or by implication referred to property in England and Wales it necessarily referred only to property there situated. There was no reason not to give the provisions of the order their natural meaning and good reason to give them such meaning.

(2) The disclosure order had been made pursuant to article 8(4) as an order made to ensure that the restraint order was effective: it followed that if the restraint order must be restricted to property within England and Wales there could be no justification for a worldwide disclosure order.

Appeal dismissed.

Andrew Mitchell QC, Fiona Jackson (instructed by in-house solicitor) for the appellant; David Perry QC, Louis Mably (instructed by Kingsley Napley) for the respondent.