Case Preview: Perry and Ors v SOCA  EWCA Civ 907 &  EWCA Civ 578
01 Tuesday May 2012
In two separate judgments, 29 July 2010 and 18 May 2011, the Court of Appeal dismissed both appeals of Perry and others v Serious Organised Crime Agency. The Supreme Court heard both appeals in one hearing on 20 March.
The central issues before the Supreme Court were whether:
- The posting of information notices by the Serious Organised Crime Agency (“SOCA”), under Part 8 of the Proceeds of Crime Act 2002 (“POCA”) to Mr Perry’s London street address amounted to a valid “giving” of the notices; and
- If the High Court in England and Wales has the power under Part 5 of POCA to make a property freezing order for civil recovery in respect of property situated outside that jurisdiction.
In October 2007, Mr Perry was convicted by the Tel Aviv-Jaffa District Court for various offences arising out of a pension scheme. Mr Perry profited from these offences and was sentenced to a 12 year jail term and fine, which was subsequently paid in full by Mr Perry, of approximately £3,184,200. SOCA later became aware of funds totaling £14 million in London-based bank accounts. SOCA was ultimately granted a worldwide freezing order pursuant to provisions of section 245A in Part 5 of POCA and information notices were served under Part 8 of POCA. Non-compliance with these provisions would be treated as a criminal offence.
First Instance decision
At first instance the case was brought to Foskett J at the High Court by SOCA, stating that the Mr Perry had been convicted of dishonesty offences in Israel and those offences could be linked to substantial sums of money which Mr Perry and his family had held in their various UK bank accounts. SOCA gave evidence in the form of a witness statement from a financial investigator and a member of staff at SOCA.
Mr Perry and his family applied to set aside the disclosure order and the information notices. They argued that the Judge had had no jurisdiction to make the disclosure order; or alternatively if the Judge did have jurisdiction he should not have had exercised his discretion in making the order. It was also said that the order had been obtained following material non-disclosure by SOCA, and that therefore the order ought to be discharged on that basis. It was further contended that the information notices had to be set aside if the order was set aside.
Foskett J however held that the application would be dismissed on the basis that:
- The conditions of making a disclosure order were essentially based on a question of fact. This being whether there were “reasonable grounds for believing” that the material relied upon by SOCA was likely to be of substantial value, and in the public interest if: (a) the benefit was likely to accrue to the civil recovery investigation if the material was obtained; and (b) the circumstances under which the person concerned had any of the material in his possession, power or control.
- As with any question of fact, the fact-finding body was entitled to draw legitimate inferences from all the material available.
Overall, it was held that there were sufficient grounds for SOCA to seek disclosure orders on the bank accounts and that there was no reason for changing the authority given to the agency and no grounds for setting aside the order. Foskett J proceeded to give his permission to appeal on the grounds that the case raised an issue of general importance.
Court of Appeal decisions
The appellant went on to bring two separate appeals to the Court of Appeal in 2010 and 2011:
- 29 July 2010 Appeal: The first appeal was heard by Carnwath LJ, Richards LJ and Ward LJ. Two distinct issues were presented. Firstly, whether SOCA has the power to issue and give information notices on persons who are outside the jurisdiction. It was accepted that that where assets have been identified within the jurisdiction which are reasonably believed to be within the scope of Part 5 of POCA there is a power to make a disclosure order. However, it was submitted that a notice under such an order may only be given to a person physically within the jurisdiction. The second issue was whether the posting of the information notices on potential informants, under Part 8 of POCA, to Mr Perry’s London street address amounted to a valid “giving” of the notices.
Carnwath LJ examined the issue of disclosure orders under s. 357 of POCA, and considered the earlier case of Masri v Consolidated Contractors International Company  EWCA Civ 898 as an authority for an out of jurisdiction judgment and concluded that, as in Masri, there must be some implied limitation on the extra-territorial scope of a disclosure order. There were also indications against reading s.357 as extra-territorial in scope. However, he stated there was a “strong public interest in this statutory regime”. More importantly neither party sought to argue that the requirement for notice to be “given” should have a special meaning. The notices were sent to Mr Perry and his family at an address within the jurisdiction which was acknowledged by them (through their solicitors) as “their London address”. On the facts it was clear that the notices were, in the ordinary use of language, “given” to the family members, and accepted by them. There was no good reason why they should fall outside the grasp of the statutory scheme. As a matter of common sense it was difficult to see why mere presence or absence from a country at the time of sending or delivery of the notice should be a critical factor. The notices would come to their attention and were acknowledged by them through their solicitors as their London address. Therefore Mr Perry and family had sufficient presence within the jurisdiction. It was concluded that a valid information notice could be given to a person who was out of the jurisdiction by posting it to an address within the jurisdiction.
Richards LJ dissented, stating that there was a clear balance in favour of construing section 357 of POCA as empowering the giving of information notices only to persons within the jurisdiction, so that the notices, while they may have been “given” in that it was sent to the family or the contents communicated to them this did not solve the jurisdictional issue, it still needed to be asked whether the notices were validly given. However, Ward LJ concurred with Carnwath LJ and the appeal was dismissed as it was held there was sufficient foundation for both the disclosure orders and the notices under them.
- 18 May 2011 Appeal: Maurice Kay LJ, Justice Tomlinson LJ and Hooper LJ sat on the case at the Court of Appeal. The second appeal considered if the High Court in England and Wales had the power under Part 5 of POCA to make a property freezing order for civil recovery in favour of the trustee in respect of property situated outside that jurisdiction.
Hooper LJ gave a detailed judgment considering all the facts of the case and relevant statutory provisions. It was held that the court did have power to make such an order, and in the case of the property located in the UK the trustee would have a personal right under English law to such property. In relation to the property located outside the jurisdiction, the trustee would have a personal right against the person subject to the civil recovery order and any other conditional or unconditional right to the property under the jurisdiction of the place where the property resides. The application was refused on the ground that the court had jurisdiction to make the freezing order in respect of property abroad and, subject to a minor modification in respect of one defendant, it had been properly made. Both Maurice Kay LJ, Justice Tomlinson LJ agreed with Hooper LJ and dismissed the appeal.
Appeal before the Supreme Court
The two issues on appeal were considered together by the Supreme Court at one hearing on 20 March 2012. Permission was granted to the appellants by the Supreme Court to hear the First Appeal issue as it was initially refused by the Court of Appeal. Permission to appeal to the Supreme Court for the Second Appeal issue was however granted by the Court of Appeal.