Serious Organised Crime Agency v Perry & Ors [2009] EWHC 1960 (Admin)

[2009] EWHC 1960 (Admin)Case No CO/7345/2008
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 30/07/2009
Before
MR JUSTICE FOSKETT
Between
SERIOUS ORGANISED CRIME AGENCYApplicant(1) Mr ISRAEL IGO PERRYRespondents(2) Mrs LEA LILI PERRYRespondent(3) Mrs TAMAR GREENSPOONRespondent(4) Miss YAEL PERRYRespondent
Anthony Peto QC and Tom Weisselberg (instructed by SOCA) for ApplicantClare Montgomery QC and Daniel Lightman (instructed by Asserson Law Offices) for RespondentsHearing Hearing dates: 8 th& 9 th July 2009
Judgment

Introduction

[1]This case raises issues about the extent and use of the powers of the Serious Organised Crime Agency (‘SOCA’) to obtain a “disclosure order” under Part 8 of the Proceeds of Crime Act 2002 (“the Act”) for the purposes of a “civil recovery investigation” under section 341(2) of that Act. Such an investigation is an investigation into(a) whether property is recoverable property or associated property within the terms of the Act,(b) who holds the property, or(c) its extent or whereabouts.[2]On 8 August 2008 SOCA sought and obtained ex parte on the papers from His Honour Judge Kay QC, in his capacity as a High Court Judge, a disclosure order against the Respondents pursuant to section 357 of the Act. In due course, “information notices” pursuant to the authority conferred by this order were issued by the Director of SOCA addressed to the First, Third and Fourth Respondents.[3]In these proceedings the Respondents seek to set aside the disclosure order and the information notices. They say that there was no jurisdiction to make the order or, if there was, the court’s discretion should not have been exercised in favour of making the order. They also say that the order was obtained following material non-disclosure by SOCA and should, therefore, be discharged. It is contended that the information notices should, accordingly, fall if the order falls.[4]The primary submission is that the Court has no jurisdiction to make a disclosure order where SOCA seeks such an order for the purpose of issuing “information notices” to persons who are not present, resident or domiciled in England and Wales and, accordingly, the “appropriate officer” has no power under the authority of a disclosure order to issue “information notices” to persons who are not present, resident or domiciled in England and Wales.

The background

[5]These proceedings arise out of a major, well-publicised and, to a degree, controversial criminal trial in Israel which, after six years of hearings, culminated in October 2007 in the conviction of the First Respondent, Mr Israel Perry, by the Tel Aviv-Jaffa District Court of serious offences of dishonesty. The consequential proceedings concluded on 5 February this year when Mr Perry’s appeal against his convictions was dismissed by the Israeli Supreme Court, although his sentence of 12 years imprisonment was reduced to 10 years. In March Mr Perry filed a petition seeking a further hearing in the Israeli Supreme Court. The legal process in Israel may, therefore, not yet be concluded. It has been submitted that I should be slow to assume that the scheme to which I will refer in greater detail below “can ever form a proper basis for a claim to be brought by SOCA.” It seems to me plain that I have to deal with matters as they stand: Mr Perry stands convicted of significant offences by the Israeli courts arising from that scheme. Should the convictions be set aside then the situation may alter.[6]Mr Perry was a well-known Attorney in Israel. He is, I am told, of dual Israeli and Polish nationality. The Second, Third and Fourth Respondents (respectively, ‘Mrs Perry’, ‘Mrs Greenspoon’ and ‘Miss Perry’) are Mr Perry’s wife and two daughters. All three are of Israeli nationality and are currently resident in Israel.[7]Mr Perry’s criminal conduct, according to the laws of Israel, arose out of a scheme he established in 1983 which was named the ‘Organization for the Implementation of the Social Security Treaty (Israel-West Germany)’. The purpose of the scheme was to enable Israeli nationals to take advantage of an international treaty made between Israel and what was then the Federal Republic of Germany (West Germany). The Treaty gave citizens of Israel who qualified the opportunity to obtain pensions from the Federal Republic of Germany by making a one-off payment to the German Social Security Agency (‘the BFA’). The Federal Republic of Germany entered into parallel treaties with several other countries. I am told that the one-off payment was calculated so as to represent the equivalent of monthly pension contributions between 1956 and 1980. The Treaty permitted registration for the German Pension until a deadline of 12 June 1983.[8]The arrangements concerning the pension scheme were not without difficulty. One problem was that the pensioners were only eligible to receive a German pension during their own lifetimes and, accordingly, those who paid the significant lump sum faced the risk that, if they were to die before receiving payments equal to or greater than their lump sum and the cost of funding it, their participation in the scheme would result in a net loss for them. The pension scheme established by Mr Perry was, it is said, designed to overcome the obstacles and risks faced by those Israeli citizens who wished to take advantage of the BFA offer. As a result of advertising and marketing of the pension scheme about 30,000 Israeli citizens registered to apply for the BFA offer before the deadline.[9]I have been told that the pension scheme set up by Mr Perry was operated primarily by two companies, BG Assistance Limited (“BGA”) and BG Finance Limited (“BGF”), both of which are registered in the Isle of Man. BGA and BGF were ultimately owned by BG Organisation Limited ("BGO"), a corporation registered in Liechtenstein, which in turn was ultimately owned by a Trust, the beneficiaries of which were certain members of the Perry family.[10]The precise details of the way the scheme operated are complex. However, it offered a financing option to those would-be participants who would have been unable or unwilling to fund the initial payments themselves. There were two approaches available: for those who were willing and able to fund the initial payment required to take up the BFA Offer, the scheme charged only legal and administrative fees (the ‘handling fees’) for the services it provided; for those who were unable or unwilling to fund the payments themselves, the scheme offered a loan sufficient to cover all costs, including the initial payment to the BFA, administrative fees and insurance premiums. I am told that the scheme assumed all of the risks associated with the transaction thus enabling acceptance of the offer without any financial risk and without breaching the prohibition imposed by the Israeli Foreign Currency Comptroller (who regarded the offer unattractive and would not grant a permit to Israeli citizens to send foreign currency out of Israel to take advantage of it.)[11]In order to cover the risk that a participant who took out one of the loans would die before the receipts from the BFA were sufficient to repay the loan, the scheme charged additional sums (“premiums”) calculated by reference to the cost of life insurance on the participants’ lives.[12]It appears that the arrangements made in respect of the life insurance premiums lies at the heart of the criminality found to have been established by the Israeli courts. The background is complex and I do not think it necessary to say more than the barest minimum for present purposes. Much of the material put before me on the background has been put forward on Mr Perry’s behalf and, accordingly, the full picture may not have emerged. However, in a nutshell, some part of the life insurance arrangements involved payment of premiums to an insurance company, Britannia Guarantee National Insurance Limited (“Britannia”), set up and registered in the Cayman Islands which was ultimately owned by Mr Perry. I am told that the Tel Aviv-Jaffa District Court held that all insurance premiums should have been paid to an independent third party insurance company and since Britannia was owned by Mr. Perry, insurance premiums paid or payable to that company were adjudged to have been "stolen".[13]In his first witness statement in these proceedings Mr Trevor Asserson, an English Solicitor in practice in Jerusalem who is Mr Perry’s solicitor in this matter, said this:
“Within some 3 months of opening his Pension Scheme to the public, Mr Perry was able to sign up 30,000 people of whom nearly 14,000 eventually went on to become pensioners under the Pension Scheme. Of those, some 4,000 people were self financing, and so did not need life insurance.”
[14]Mr Perry continues to challenge the conclusion of the Israeli courts, contending that the life insurance element of the scheme was legitimate and gave rise to no benefit to him. He also asserts in the proceedings before me that the Israeli courts have not concluded that all sums that he received by virtue of his involvement in the scheme were obtained dishonestly: those courts did not, it is said, find him guilty of any offences in respect of the handling and legal fees charged (see paragraph 10 above) or where money was made from the interest rate margins between the German interest rates at which his companies borrowed money from a German bank, Berliner Handels und Frankfurter Bank (‘BHF’) – rates which generally declined during the relevant period – and the fixed rate charged on the loans to the participants in the scheme.[15]As I have indicated, I am not in a position to, nor am I required to, form any view about these matters. I merely record them to give a flavour of the background to the issues that arise in the present application.[16]It is the finding of dishonesty and the discovery that Mr Perry and his family have very significant sums of money in bank accounts in England that led SOCA to take the proceedings that give rise to the present application.

The statutory regime

[17]I will say more about the legislative purpose of the provisions to which I am about to refer in due course, but I should record those provisions that are directly relevant to the issues in the case.[18]Section 240 sets out the General purpose of Part 5 of the Act:(1) This Part has effect for the purposes of— (a) enabling the enforcement authority to recover, in civil proceedings before the High Court …, property which is, or represents, property obtained through unlawful conduct, (b) ….(2) The powers conferred by this Part are exercisable in relation to any property … whether or not any proceedings have been brought for an offence in connection with the property.[19]Section 241 sets out what constitutes “unlawful conduct”:(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part.(2) Conduct which— (a) occurs in a country … outside the United Kingdom and is unlawful under the criminal law applying in that country…, and (b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part, is also unlawful conduct.(3) The court … must decide on a balance of probabilities whether it is proved— (a) that any matters alleged to constitute unlawful conduct have occurred, or (b) that any person intended to use any cash in unlawful conduct.[20]Section 242 defines what constitutes “Property obtained through unlawful conduct”:(1) A person obtains property through unlawful conduct (whether his own conduct or another's) if he obtains property by or in return for the conduct.(2) In deciding whether any property was obtained through unlawful conduct— (a) it is immaterial whether or not any money, goods or services were provided in order to put the person in question in a position to carry out the conduct, (b) it is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct.[21]Chapter 2 of Part 5 deals generally with “Civil recovery” and proceedings in support of a “recovery order”. Section 243 provides as follows:(1) Proceedings for a recovery order may be taken by the enforcement authority in the High Court against any person who the authority thinks holds recoverable property.(2) The enforcement authority must serve the claim form— (a) on the respondent, and (b) unless the court dispenses with service, on any other person who the authority thinks holds any associated property which the authority wishes to be subject to a recovery order, wherever domiciled, resident or present.(3) If any property which the enforcement authority wishes to be subject to a recovery order is not specified in the claim form it must be described in the form in general terms; and the form must state whether it is alleged to be recoverable property or associated property.(4) The references above to the claim form include the particulars of claim, where they are served subsequently.(5) Nothing in sections 245A to 255 limits any power of the court apart from those sections to grant interim relief in connection with proceedings (including prospective proceedings) under this Chapter.[22]Part 8 deals with ‘Investigations’. Section 341 spells out the types of investigation with which the Act is concerned:(1) For the purposes of this Part a confiscation investigation is an investigation into— (a) whether a person has benefited from his criminal conduct, or (b) the extent or whereabouts of his benefit from his criminal conduct.(2) For the purposes of this Part a civil recovery investigation is an investigation into— (a) whether property is recoverable property or associated property, (b) who holds the property, or (c) its extent or whereabouts.(3) But an investigation is not a civil recovery investigation if— (a) proceedings for a recovery order have been started in respect of the property in question, (b) an interim receiving order applies to the property in question, (c) an interim administration order applies to the property in question, or (d) the property in question is detained under section 295. (3A) …(4) For the purposes of this Part a money laundering investigation is an investigation into whether a person has committed a money laundering offence.[23]Section 357 sets out the ground upon which a “disclosure order” may be made:(1) A judge may, on an application made to him by the Director, make a disclosure order if he is satisfied that each of the requirements for the making of the order is fulfilled. (2A) …(2) No application for a disclosure order may be made in relation to a money laundering investigation.(3) The application for a disclosure order must state that— (a) a person specified in the application is subject to a confiscation investigation which is being carried out by the Director and the order is sought for the purposes of the investigation, or (b) property specified in the application is subject to a civil recovery investigation and the order is sought for the purposes of the investigation.(4) A disclosure order is an order authorising the Director to give to any person the Director considers has relevant information notice in writing requiring him to do, with respect to any matter relevant to the investigation for the purposes of which the order is sought, any or all of the following— (a) answer questions, either at a time specified in the notice or at once, at a place so specified; (b) provide information specified in the notice, by a time and in a manner so specified; (c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified.(5) Relevant information is information (whether or not contained in a document) which the Director considers to be relevant to the investigation.(6) A person is not bound to comply with a requirement imposed by a notice given under a disclosure order unless evidence of authority to give the notice is produced to him. …. ….[24]Section 358 sets out the requirements for making a “disclosure order”:(1) These are the requirements for the making of a disclosure order.(2) There must be reasonable grounds for suspecting that— (a) … (b) in the case of a civil recovery investigation, the property specified in the application for the order is recoverable property or associated property.(3) There must be reasonable grounds for believing that information which may be provided in compliance with a requirement imposed under the order is likely to be of substantial value (whether or not by itself) to the investigation for the purposes of which the order is sought.(4) There must be reasonable grounds for believing that it is in the public interest for the information to be provided, having regard to the benefit likely to accrue to the investigation if the information is obtained.[25]Section 362 sets out supplementary provisions as follows:(1) An application for a disclosure order may be made ex parte to a judge in chambers.(2) Rules of court may make provision as to the practice and procedure to be followed in connection with proceedings relating to disclosure orders.(3) An application to discharge or vary a disclosure order may be made to the court by— (a) the Director; (b) any person affected by the order.(4) The court— (a) may discharge the order; (b) may vary the order. …[26]I will, as indicated above, turn to the legislative purpose of these provisions in due course when assessing the challenge made to the order made by His Honour Judge Kay QC. Before doing so I should, however, record the precise terms of the order made.

The order made

[27]The order made by Judge Kay was in the following terms: An application having been made pursuant to section 357 of the Proceeds of Crime Act 2002 by the Serious Organised Crime Agency (“SOCA”), And upon reading the witness statement of Vanessa Ewing dated the 5 day of August 2008, THE COURT IS SATISFIED that the relevant requirements for making a disclosure order are fulfilled. THIS ORDER IS MADE for the purposes of a civil recovery investigation being carried out by SOCA, the nature of which is as follows; To determine whether all or any of the property held by or on behalf of ISRAEL IGO PERRY is recoverable property or associated property under the Proceeds of Crime Act 2002. IT IS ORDERED THAT: 1. SOCA is hereby authorised to give to any person it considers may have relevant information a notice in writing requiring that person to do any or all of the following, with respect to any matter which SOCA considers to be relevant to the civil recovery investigation set out above:(a) answer questions, either at a time specified in the notice or at once, at a place so specified;(b) provide information specified in the notice, by a time and in a manner so specified; and(c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified; that are relevant to a civil recovery investigation being conducted by SOCA. 2. The notice may be given by SOCA or by a member of the staff of SOCA or by any other person providing services under arrangements made by SOCA, providing that the person is authorised for that purpose, either generally or specifically, by SOCA. 3. Upon being given that notice and a copy of this Order the recipient must comply with the requirements in the notice. Taking copies 4. Any member of staff of SOCA or any other person acting on behalf of SOCA (who is authorised for such purposes) may take copies of any material which is produced. Exclusions 5. Nothing in this Order requires a person to answer questions, provide information, or produce material which consists of items subject to legal professional privilege, but a lawyer may be required to provide the name and address of a client of his or hers. Nothing in this order requires a person to produce excluded material. Service of evidence 6. SOCA has liberty not to serve the evidence in support of the application for this Order. Liberty to apply 7. Any person served with, notified or affected by this order may apply to the Judge who made this order (or if he or she is not available, to another High Court Judge) at any time to vary or discharge this order (or as much of it as affects that person) but they must first inform SOCA in writing, and unless the matter is urgent, give at least two clear working days notice.” … IT IS ORDERED THAT: (a) answer questions, either at a time specified in the notice or at once, at a place so specified; (b) provide information specified in the notice, by a time and in a manner so specified; and (c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified; that are relevant to a civil recovery investigation being conducted by SOCA. Taking copies Exclusions Service of evidence Liberty to apply …

Liberty to apply

[28]It contained a penal notice in the usual terms and the following notes at the end of the

The evidential background to SOCA’s application

[29]In order to set the scene for the evidence deployed by SOCA in this case it is necessary to know that all Respondents had various accounts with the English bankers, Messrs C. Hoare & Co (‘Hoares’) and Mr Perry held various accounts in London with Bank J Safra (Gibraltar) Limited (‘Safra Bank’). Mr Asserson has confirmed that these two banks hold approximately ₤14 million (albeit in various currencies) and additional sums in other assets. Indeed, immediately following the granting of the disclosure order, SOCA served a disclosure notice on Hoares the response to which identified a number of bank accounts held by the Respondents. Some accounts held very significant sums of money totalling almost £5 million, approximately €1.6 million and over US$280,000.[30]It is clear that, following Mr Perry’s conviction, Hoares became concerned that some or all of the monies in these accounts may have represented “property obtained through unlawful conduct” within the Act and became concerned about its own position. It ceased accepting instructions on the accounts. In May 2008 a meeting took place between Mr Asserson and Mr John Newbegin, Head of Compliance at Hoares, to discuss the situation. Following that meeting Mr Asserson wrote a lengthy letter dated 3 June to Mr Newbegin in which a great deal of background information from Mr Perry’s side was given.[31]Given that it is acknowledged on SOCA’s behalf that it first became aware of Mr Perry’s conviction in May 2008, the inference to be drawn is that Hoares alerted SOCA to the position. If that is so, Hoares would plainly have been acting very properly in the circumstances. About 3 months later SOCA sought the order the subject of this application from His Honour Judge Kay QC. Presumably, SOCA had undertaken investigations in the meantime.[32]SOCA relied upon a witness statement from Ms Vanessa Ewing, a Financial Investigator and member of staff of SOCA, dated 5 August 2008. Since it is suggested on Mr Perry’s behalf that there were inadequacies in that statement and, in some respects, there was material non-disclosure, I should endeavour to summarise what it said. That summary needs to be considered against the background of the primary submission made on Mr Perry’s behalf (see paragraph 4 above), namely, that persons who are not present, resident or domiciled in England and Wales may not be made the subject of a disclosure order or the recipient of an information notice issued under the authority of such an order.[33]Since the order was sought ex parte it is to be noted that Ms Ewing indicated at an early stage in her statement that she was “aware of [her] obligation to notify the Court of all material facts of which it should be aware, and in particular of any facts which would undermine [her] beliefs or weaken this application.”[34]She asserted that there were “reasonable grounds to suspect that property held by [Mr Perry] … [was] recoverable property … or associated property … and as such [it] been obtained through unlawful conduct … or [was] a separate interest within property obtained by unlawful conduct.” She recited in some detail her understanding of the criminality of which Mr Perry had been convicted, how the prosecution came about and the sums involved. She put forward her belief that “under section 241 of the Act a civil recovery investigation is appropriate as, had this conduct taken place in the United Kingdom it would have constituted criminal conduct.” She said the following by way of a general assertion on the merits of the application:
“2.3 SOCA is seeking a Disclosure Order as part of the ongoing Civil Recovery Investigation. The materials in respect of which SOCA is seeking an Order will be of substantial value to the investigation as they will enable SOCA to ascertain the extent and whereabouts of the recoverable property and who holds it. This will help SOCA to decide whether or not to bring about Civil Recovery Proceedings. 2.4 It is in the public interest that if there is evidence that the property held by [Mr Perry] has been obtained through unlawful conduct it is discovered and a Civil Recovery action be pursued.”
[35]Ms Ewing asserted that the “property that is subject to the civil recovery investigation is any property held by or on behalf of [Mr Perry]including, but not limited to … [monies] which have been credited to or have passed through … [accounts] held by or on behalf of [Mr Perry], including accounts held by his wife … and/or his two adult daughters ….” She said this:
“Based on information I have received, I believe that there are UK bank accounts in the name of [Mr Perry], [Mr Perry’s] wife … and his adult children …. I also believe that the amount of money held is in excess of £5 million.”
[36]In terms of the connection of Mr Perry and the specified members of his family with the UK she said the following:
“5.4 Based on information I have received, I believe that [Mr Perry] has a correspondence address in central London and also a secretary based in London. From a search of Companies House records, I have established that [Mr Perry] was a Director of a UK company based in central London called Guest Krieger Limited. The company is still active and has a website at www.guestkrieger.com. [Mr Perry] was a Director of the company from at least 1st October 1992 until he resigned on 5th September 2001. The company’s website states that the company acts as “a broker in the financial services industry”. 5.5 Between 9th June 1999 and 13th January 2005 [Mr Perry] was the Director of another UK company called Solid Capital Markets (UK) Limited. His directorship came to an end when the company was dissolved. At present no further information is known about this company or [Mr Perry’s] involvement. 5.6 The above information suggests that, apart from his banking activities, [Mr Perry] has links with the UK and that he may have conducted some type of business in London. As the investigation progresses, it may be necessary to conduct interviews to establish the nature of any business carried out by [Mr Perry] in the UK.”
[37]Miss Clare Montgomery QC, for the Respondents, submitted forcefully that SOCA must have known at the time the application was made that Mr Perry and the other Respondents were in Israel. She asserts that SOCA has failed to identify the date upon which it became aware that the potential subjects of any disclosure orders were not physically present in England and Wales. She submitted that SOCA had been aware since May 2008 that each of the Respondents was in Israel and was likely to remain there for the foreseeable future. It is, of course, a fundamental feature of her submissions that a disclosure order cannot be made in relation to persons who are not present, resident or domiciled in England and Wales, but equally (leaving aside the jurisdiction argument) that the failure by SOCA to disclose that the potential or actual targets of the disclosure order or information notices were outside England and Wales represented material non-disclosure.[38]I will deal with the jurisdiction argument below (see paragraphs 43-68), but in relation to the issue of fact as to the whereabouts of the various Respondents and the related disclosure, there are two conclusions to which I would come:(i) SOCA probably did know or suspect that Mr Perry was (and the relevant members of his family were) in Israel (or at least not in the UK) when the disclosure order was sought;(ii) paragraphs 5.4-5.6 of Ms Ewing’s witness statement did not suggest that Mr Perry had anything other than “links with the UK”. In other words, any fair reading of the statement would suggest that he was probably not in the UK at the time. To the extent that it mattered whether he was or was not in the UK at the time, it seems to me that proper disclosure was made.[39]In paragraph 6.1 of her statement Ms Ewing said this:
“At present SOCA do not know if [Mr Perry] had any legitimate sources of income and will seek to investigate this as appropriate. It is known that [Mr Perry] was or still is an attorney in Israel.”
[40]This would suggest, in my view, that the Court was being told, if not explicitly, that Mr Perry was probably in Israel at the time the application was being made. If, of course, his location at the time the order was made was irrelevant, then, of course, there could be no question of non-disclosure even if the conclusion to which I have referred is wrong.[41]It is also submitted that Ms Ewing failed to disclose that much of the material relied upon in support of the application for the disclosure order had been provided voluntarily by Mr Perry to Hoares through Mr Asserson. The suggestion is that the Court should have been made aware of the fact that Mr Perry was taking legal advice at the time and would likely have known about a probable investigation by SOCA since this would have been relevant to the Court's decision in granting such a highly intrusive order.[42]I do not consider that SOCA can be criticised legitimately for this. It would have involved revealing the contact made between Hoares and the Agency, which it may have felt was not appropriate at the time, and, in any event, the revelation, if it had been made, would not necessarily have militated against making the order sought, in my view.

The legislative purpose of the Act

[43]In Assets Recovery Agency v Virtosu & Virtosu [2008] EWHC 149 (QB), Tugendhat J referred (at paragraph 19) to the legislative purpose of the Act and to a Report that underlay it as follows:
“The legislative purpose of the Act is discussed and set out in the “Recovering the Proceeds of Crime: A Performance and Innovation Unit Report June 2000 issued by the Cabinet Office (“the Report”). The report is referred to by Latham LJ in Singh v Claimant of the Assets Recovery Agency [2005] EWCA Civ 580 para. 9. …. The Report states that the civil forfeiture route is not to be adopted as a “soft option” in place of criminal proceedings (para. 5.24). The rationale for civil forfeiture is stated as follows: 5.12 The proposed civil forfeiture regime is intended to provide: • a reparative measure – taking away from individuals that which was never legitimately owned by them; and • a preventative measure – taking assets which are intended for use in committing crime. 5.13 Although civil forfeiture is not intended as a punitive measure, it can be expected to be keenly felt and strongly resisted by individuals who have grown accustomed to having possession of their unlawful assets. … the large body of anecdotal evidence from UK and other overseas law enforcement [shows] that individuals associated with criminal activities are as concerned about losing their assets as they are about losing their liberty, in some cases more so. 5.14 Like other forms of asset recovery, civil forfeiture is a disincentive to crime – more effective recovery of unlawful assets will act to reduce the anticipated reward in the risk/reward trade-offs that some criminals make (as explained in Chapter 3). And it reinforces the rule of law – by demonstrating that the justice system will work effectively to remove illegal gains (also explained in Chapter 3). In addition, it: • opens up a new route to tackling assets that are currently beyond the reach of the law. Civil forfeiture should be used in particular to disrupt the activities of organised crime heads who are remote from crimes committed to their order, yet enjoy the benefits; and • should allow the recovery of unlawful assets held in the UK, but derived from crime committed overseas.”
[44]In Singh (Satnam) v Director of the Assets Recovery Agency, referred to in the quotation from Tugendhat J’s judgment, when considering the provisions of the Act, the Court of Appeal (per Latham LJ) said this:
“The clear intention of Parliament was to ensure that, so far as possible, criminals should be deprived of the possibility of benefiting from their crimes. In construing any statute we are now encouraged to search for Parliament's purpose: see Lord Bingham in R (Quintavalle) v Health Secretary[2003] 2 AC 687, [2003] UKHL 13, at paragraph 8. Whilst recognising that Lord Steyn at paragraph 21 urged caution in relation to certain categories of statute, in the present case the meaning of the words and the purpose of the legislature are both abundantly clear and march hand in hand.”
[45]These two quotations from judgments that refer to the Cabinet Office report do suggest, at first sight,(i) that “the recovery of unlawful assets held in the UK, but derived from crime committed overseas” is an objective of the statutory measures introduced in consequence or furtherance of the report and(ii) that there is nothing to suggest that the presence or absence from the jurisdiction of those who control the “unlawful assets” from the UK courts is relevant to the powers to be conferred by the Act based upon the report. So far as (i) is concerned, the Act has expressly recognised that a crime committed outside the United Kingdom may constitute “criminal conduct” for the purposes of a civil recovery[46]Only a limited amount of Parliamentary material has been placed before me (see paragraphs 43-44 above and paragraph 82 below) and I am, accordingly, unsure whether there is anything within that overall material that undermines the view referred to in the preceding paragraph. If there is nothing that does undermine the conclusion about the objective to which I have referred, it is easy to understand the overall policy objective, namely, of ensuring that the UK is not (and is not seen internationally as) a safe haven for the proceeds of crime wherever the crime may have been committed.[47]The submission made on behalf of SOCA is that there is nothing in Part 8 of the Act that restricts the ability of the Court to make a disclosure order to a case in which persons are present, resident or domiciled in the UK. It is submitted that section 358 of the Act (see paragraph 24 above) does not impose such a requirement and the argument is that there is no reason in principle why the powers should be restricted.[48]The apparently essentially unlimited territorial extent of the powers intended for the Act by the report upon which it is based needs to be examined by reference to the precise terms of the Act. Did Parliament impose fetters on the territorial extent of those powers? There are two particular aspects upon which Miss Montgomery relies.[49]She submitted that the territorial limits of the jurisdiction to make a disclosure order under section 357 (which is within Chapter 2 of Part 8 of the Act) are set by sections 461(2) which states as follows:
“In Part 8, Chapter 2 extends to England and Wales and Northern Ireland only.”
[50]If she was right in her submission, that would mean that no disclosure order could be made in respect of property in this country thought to represent the benefit obtained from criminal activities conducted anywhere other than within England, Wales or Northern Ireland. Given the overall legislative purpose, I cannot believe that that was what Parliament intended. The answer lies in the limited purpose of section 461 which Mr Anthony Peto QC, for SOCA, suggested (perhaps a little inelegantly) was to “chop up” parts of the legislation. Section 461(2) seems to me to mean simply that the law is that in the courts of England, Wales and Northern Ireland orders under Chapter 2 of Part 8 may be made. Section 461(3) provides that, with modifications to accommodate the Scottish legal system, orders under Chapter 3 of Part 8 (which contain the equivalent provisions in relation to ‘Investigations’ for Scotland as those provided in Part 2 for England, Wales and Northern Ireland) may be made in Scotland. Section 461(3)(b) and 461(4) deal with orders that may be made in Scotland and Northern Ireland respectively in respect of confiscation. This is a reflection of the proposition that “The ‘extent’ of an Act is the geographical area throughout which it is law”: see Code S 103, Bennion on Statutory Interpretation, 5th Edition, 2008.[51]In my view, none of these provisions sets the territorial limits for the effect of the powers conferred by the relevant parts of the Act: they merely confirm or specify within which parts of the United Kingdom those specific powers may be exercised by the making of an order. The limits, if any, of the extent to which an order made pursuant to the exercise of the powers conferred by the Act may have an impact outside those specified parts of the United Kingdom are to be determined by reference to other provisions within the Act and the normal canons of statutory construction.[52]There is no dispute between the parties about those canons of construction. The most recent articulation, expressed in summary form, is in King v Director of the Serious Fraud Office [2009] 1 WLR 718where Lord Phillips of Worth Matravers referred to the “well-established canon of construction that requires clear language if an Act is to be given extra-territorial effect.” It follows that an Act may have extra-territorial effect, but for that to be the effect “clear language” is required.[53]Some authorities speak in terms of a presumption (or assumption) that a statute is not intended to have extra-territorial effect unless a contrary intention is expressed or implied see, e.g., Office of Fair Trading v Lloyds TSB Bank plc and others [2008] 1 AC 316, per Lord Hoffmann at paragraph 4. “That there is such a presumption is not, I think, in doubt:” per Lord Bingham of Cornhill in Regina (Al-Skeini and others) v Secretary of State for Defence (The Redress Trust and others intervening) [2008] 1 AC 153 at paragraph 11. It is, perhaps, a moot point as to the role of a presumption when “Parliament's purpose” (see paragraphs 45 and 46 above) is clearly to be determined from the report upon which the relevant Act is based. However, it is the approach that must be followed. The presumption is, perhaps, to be regarded as a fortiori if the argued effect of an Act is to create an offence triable in an English criminal court in relation to the conduct of a foreigner carried out outside the jurisdiction: Air India v Wiggins (1980) 71 Cr App R 213.[54]In Arab Bank plc v Merchantile Holdings Ltd [1994] Ch 71, at 83, Millett J, as he then was, said this:
“There is a presumption that, in the absence of a contrary intention express or implied, United Kingdom legislation does not apply to foreign persons or corporations outside the United Kingdom whose acts are performed outside the United Kingdom.”
[55]In Arab Bank Plc v Merchantile, the issue was whether a foreign subsidiary of an English parent company was prohibited by section 151 of the Companies Act 1985 from giving financial assistance for the acquisition of shares in the parent company. In that case the wholly-owned subsidiary was incorporated in Gibraltar. At the time the relevant transaction was entered into (the provision by the subsidiary of security to the plaintiff bank in connection with a loan to enable S Ltd to acquire the share capital of the English parent company), S Ltd and the foreign subsidiary entered into the transaction in good faith and on the basis that it was not caught by section 151. At the time of the subsequent proceedings, it suited them to maintain that the transaction was unlawful. Millett J held that section 151 was not intended to have the extra-territorial effect for which S Ltd and the foreign subsidiary of the English parent company contended.[56]Clark (Inspector of Taxes) v Oceanic Contractors Inc [1989] 2 AC 130 concerned the question of whether a foreign corporation registered in Panama, and thus not resident for income tax purposes in the United Kingdom, but which had certain trading establishments in the United Kingdom with an address for service and whose payments to the relevant employees was subject to Schedule E income tax, was obliged to operate the P.A.Y.E. tax collection procedure by deducting tax and accounting for it to the Inland Revenue. The House of Lords (by a majority of 3:2) held that it did.[57]At page 145 Lord Scarman said this: “It is well settled law that English legislation is primarily territorial: Ex parte Blain (1879) 12 Ch.D. 522, 528, per Brett L.J. The principle was recognised and formulated (admittedly in language which now has echoes of a world which has departed) by the Court of Appeal in Ex parte Blain, and was commented on with approval by the Earl of Halsbury L.C. in Cooke v. Charles A. Vogeler Co. [1901] A.C. 102. Two passages from the judgments in Blain's case, 12 Ch.D. 522 are directly relevant to the issue in this case. First, a passage from the judgment of James L.J. At p. 526, he referred to the "broad, general, universal principle that English legislation, unless the contrary is expressly enacted or so plainly implied as to make it the duty of an English court to give effect to an English statute, is applicable only to English subjects or to foreigners who by coming into this country, whether for a long or a short time, have made themselves during that time subject to English jurisdiction ... But, if a foreigner remains abroad, if he has never come into this country at all, it seems to me impossible to imagine that the English legislature could have ever intended to make such a man subject to particular English legislation." And secondly, a passage from the judgment of Cotton L.J. at pp. 531-532: "all laws of the English Parliament must be territorial - territorial in this sense, that they apply to and bind all subjects of the Crown who come within the fair interpretation of them, and also all aliens who come to this country, and who, during the time they are here, do any act which, on a fair interpretation of the statute as regards them, comes within its provisions. ... If he is resident here temporarily, and does an act which comes within the intent and purview of a statute, he, as regards that statute, as does every alien who comes here in regard to all the laws of this realm, submits himself to the law, and must be dealt with accordingly. As regards an Englishman, a subject of the British Crown, it is not necessary that he should be here, if he has done that which the Act of Parliament says shall give jurisdiction, because he is bound by the Act by reason of his being a British subject, though, of course, in the case of a British subject not resident here, it may be a question on the construction of the Act of Parliament whether that which, if he had been resident here, would have brought him within the Act, has that effect when he is not resident here." Put into the language of today, the general principle being there stated is simply that, unless the contrary is expressly enacted or so plainly implied that the courts must give effect to it, United Kingdom legislation is applicable only to British subjects or to foreigners who by coming to the United Kingdom, whether for a short or a long time, have made themselves subject to British jurisdiction. Two points would seem to be clear: first, that the principle is a rule of construction only, and secondly, that it contemplates mere presence within the jurisdiction as sufficient to attract the application of British legislation. Certainly there is no general principle that the legislation of the United Kingdom is applicable only to British subjects or persons resident here. Merely to state such a proposition is to manifest its absurdity. Presence, not residence, is the test.” "broad, general, universal principle that English legislation, unless the contrary is expressly enacted or so plainly implied as to make it the duty of an English court to give effect to an English statute, is applicable only to English subjects or to foreigners who by coming into this country, whether for a long or a short time, have made themselves during that time subject to English jurisdiction ... But, if a foreigner remains abroad, if he has never come into this country at all, it seems to me impossible to imagine that the English legislature could have ever intended to make such a man subject to particular English legislation." "all laws of the English Parliament must be territorial - territorial in this sense, that they apply to and bind all subjects of the Crown who come within the fair interpretation of them, and also all aliens who come to this country, and who, during the time they are here, do any act which, on a fair interpretation of the statute as regards them, comes within its provisions. ... If he is resident here temporarily, and does an act which comes within the intent and purview of a statute, he, as regards that statute, as does every alien who comes here in regard to all the laws of this realm, submits himself to the law, and must be dealt with accordingly. As regards an Englishman, a subject of the British Crown, it is not necessary that he should be here, if he has done that which the Act of Parliament says shall give jurisdiction, because he is bound by the Act by reason of his being a British subject, though, of course, in the case of a British subject not resident here, it may be a question on the construction of the Act of Parliament whether that which, if he had been resident here, would have brought him within the Act, has that effect when he is not resident here."[58]In the context of that case the majority of the House held that since(i) the company was deemed by virtue of section 38 (4) of Finance Act 1973 to be trading in the United Kingdom and thereby liable to corporation tax under section 246 of the Income and Corporation Taxes Act 1970,(ii) its employees were subject to Schedule E income tax and(iii) it had an address for service in the United Kingdom, it had a “trading presence” that was sufficient to activate the P.A.Y.E. obligation.[59]If one stood back from any specific legislative purpose of the Act that may be derived from other sources and asked what objection in principle there could be to the UK authorities assuming some investigatory and possibly confiscatory function over a foreign national who places the proceeds of criminal activity within the jurisdiction, particularly if he has other connections (e.g. a postal address, a business interest and at least a historic period of residence and liability to UK tax) within the jurisdiction, it is difficult to see what justifiable objection to those functions there could be.[60]Since I perceive it to have been at least part of the legislative purpose of the provisions under review to afford a statutory basis for the invocation of such powers (see paragraph 46 above), it is necessary to see whether that purpose has been carried through into the phraseology of the Act or whether there is anything within the phraseology of the Act that limits the proposed legislative purpose. Mr Peto, who argues that the Act is designed to achieve civil recovery in respect of persons anywhere in the world and property anywhere in the world derived from unlawful conduct anywhere in the world (recovery ‘sans frontières’, as he put it) has drawn my attention to a number of specific provisions as supporting the general proposition that the Act is not confined to making a disclosure order only in respect of persons who are present, resident or domiciled in the UK.

Section 243(1) and (2)

[61]These provide as follows:(1) Proceedings for a recovery order may be taken by the enforcement authority in the High Court against any person who the authority thinks holds recoverable property.(2) The enforcement authority must serve the claim form— (a) on the respondent, and (b) unless the court dispenses with service, on any other person who the authority thinks holds any associated property which the authority wishes to be subject to a recovery order, wherever domiciled, resident or present. (a) on the respondent, and (b) unless the court dispenses with service, on any other person who the authority thinks holds any associated property which the authority wishes to be subject to a recovery order, wherever domiciled, resident or present.[62]Mr Peto draws attention to the words “wherever domiciled, resident or present” to demonstrate that the civil recovery process may operate outside the jurisdiction indicating, he submits, that SOCA may take proceedings under the powers conferred by the Act wherever in the world the person or persons the subject of the proceedings may be.

Sections 245A, 245F, 246 and 250

[63]I will not extend this judgment by setting out each of these provisions. Mr Peto submits that there is nothing within the phraseology of these provisions that limits the invocation of the powers conferred by them to persons who are present, resident or domiciled in England and Wales.

Sections 316(4) and 414(1)

[64]These two provisions define “property” for the purposes of the Act. They are in identical terms: Property is all property wherever situated and includes—(a) money,(b) all forms of property, real or personal, heritable or moveable,(c) things in action and other intangible or incorporeal property.

Property is all property wherever situated and includes—

[65]Mr Peto draws attention to the words “wherever situated” in support of the general proposition he advanced to which I referred in paragraph 60.

The Respondents’ response

[66]Miss Montgomery submits that the claims Mr Peto makes reflect support for an “exorbitant” jurisdiction that represents an “affront to comity”.

Conclusion on jurisdiction

[67]I propose to confine my conclusion to the particular facts of this case. The case involves unlawful conduct committed abroad by someone who SOCA has reasonable grounds for believing has brought into the jurisdiction property obtained as the result of that unlawful conduct. In my judgment, that is sufficient to afford grounds for seeking and obtaining a disclosure order and the issue of “information notices” pursuant to such an order. That conclusion would mean that the person in whose name the money or property in this jurisdiction is lodged may be open to a “civil recovery investigation” even if he or she has no other connection with the jurisdiction. This seems to me to be the legislative purpose of the Act which is supported, in particular, by section 243(1) and (2) (see paragraph 61 above) and is not negated by any other provision within the Act. If, contrary to that view, there needs to be some closer connection between the person in respect of whom the disclosure order is sought and the jurisdiction, it is in this case afforded by(a) the accounts in Mr Perry’s name and those of his family members,(b) his past and present business interests here,(c) his postal address and(d) his past residence (together with that of his wife) in the jurisdiction and his liability, at least for a period, to UK tax.[68]It follows, therefore, that Mr Perry and his family were, in my view, legitimate targets for a “disclosure order” and, in consequence, for “information notices”. Merely because they were (or may have been) outside England and Wales at the time the order was made (and not otherwise domiciled here) does not mean that such an order could not be made. In other words, there was jurisdiction to make the order.

Should the order have been made?

[69]Subject to the matters I will refer to in paragraphs 70-78 below, in my view, Ms Ewing’s witness statement disclosed adequate material for the making of the order, as indeed His Honour Judge Kay QC must himself have determined. I have already indicated that I do not consider that there was material non-disclosure in the respects contended for by Miss Montgomery (see paragraphs 37-42).[70]The principal matter that remains for consideration is whether the manner in which certain important aspects of the material necessary for the making of a disclosure order was sufficiently clearly and fully articulated in Ms Ewing’s witness statement.[71]Miss Montgomery points to the intrusive nature of a “disclosure order” (and, as she puts it, “the uniquely intrusive coercive power” of an information notice based on such an order) and argues that the evidence relied upon in Ms Ewing’s witness statement was wholly insufficient to satisfy the Court(i) that there were “reasonable grounds for believing that the information which may be provided in compliance with the order as to the likelihood of material of substantial value … to the investigation for which it is sought” being obtained or(ii) as to the “public interest for the information to be produced having regard to the benefit likely to accrue to the investigation if the information is obtained”: see paragraph 24 above. She submits that the bare recitation of the statutory conditions coupled with an assertion that they are satisfied is a wholly inadequate evidential basis on which to seek a disclosure order. That, she says, is what Ms Ewing’s statement amounts to in relation to these two areas.[72]It is correct to say that Ms Ewing’s witness statement merely asserts that the materials in respect of which SOCA was seeking an order would “be of substantial value to the investigation as they will enable SOCA to ascertain the extent and whereabouts of the recoverable property and who holds it.” This assertion is repeated elsewhere in the statement which also reveals that “there is at least one financial institution” which is “believed to hold information which will be of particular relevance to the investigation and will help SOCA to decide whether to not to bring about civil recovery proceedings.” Equally, Ms Ewing makes the unparticularised assertion “that it is in the public interest that if there is evidence that the property held by Perry has been obtained through unlawful conduct it is discovered and a civil recovery action be pursued”, again a contention that is repeated elsewhere in the statement.[73]Ms Ewing indicates why a disclosure order is sought rather than a “production order” under section 345 in the following way:
“… it is in the public interest to rely upon a Disclosure order in preference to applying for Production Orders or other orders on an individual basis because I believe the investigation will continue to be fast paced and there will be insufficient time to apply to the Court to obtain separate Orders each time an order is required. In addition it is likely that the Agency will need to conduct interviews during the course of the investigation.”
[74]In the context of the making of a bare assertion of belief in support of an application for an order that may fairly be described as “intrusive” Miss Montgomery drew attention to R (on the application of Malik) v Manchester Crown Court and another [2008] 4 All ER 403. The order sought and obtained in that case was a production order against a journalist in relation to material in his possession concerning a self-confessed terrorist about whom he was writing a book. There were two conditions to be fulfilled before the judge to whom the application was made could be satisfied before an order could be made. They are set out in schedule 5 of the Terrorism Act 2000:
“(2) The first condition is that - (a) the order is sought for the purposes of a terrorist investigation, and (b) there are reasonable grounds for believing that the material is likely to be of substantial value, whether by itself or together with other material, to a terrorist investigation. (3) The second condition is that there are reasonable grounds for believing that it is in the public interest that the material should be produced or that access to it should be given having regard— (a) to the benefit likely to accrue to a terrorist investigation if the material is obtained, and (b) to the circumstances under which the person concerned has any of the material in his possession, custody or power.”
[75]The judge was satisfied as to the two specified “access conditions” and the Court of Appeal (which emphasised that, as in the present case, the proceedings were not proceedings by way of appeal) concluded that there was no basis for a public law challenge to those decisions. The full quotation on the material aspect of the Court of Appeal’s judgment (per Dyson LJ, at paragraph 37) is as follows:
“37 It is important to emphasise that the judge does not have to be satisfied that the material is in fact likely to be of substantial value. He or she need only be satisfied that there are reasonable grounds for believing that it is likely to be of substantial value. On the other hand, belief is what is required: mere suspicion will not suffice. The judge will hear evidence on behalf of the constable who is making the application who will be expected not only to say that he considers that there are reasonable grounds for believing that the material sought is likely to be of substantial value to the investigation, but also to explain to the judge the basis for this belief. A bare assertion will not suffice. Thus, for example, in one of the cases heard in ex parte Bright, this court held that the circuit judge had been wrong to conclude that the statutory test had been satisfied: “on the evidence, at most, there was the possibility that such material might be available” …. See too the approach and conclusion on the facts in Re Moloney's Application for Judicial Review [2000] NIJB 195 per Carswell LCJ at p 206–207. Whether the first access condition is satisfied in any particular case is essentially a question of fact.”
[76]For my part, whether the conditions for the making of a disclosure order exist or do not exist is, as indicated in the extract from the judgment in Malik, essentially a question of fact, the question being whether there are “reasonable grounds for believing” that the two grounds exist. As with any question of fact the fact-finding body (here the judge considering the application) is entitled to draw legitimate inferences from all the material available. Doubtless increased scrutiny will be shown where a generalised assertion as to the existence of the statutory grounds is advanced. The court is indeed not exercising a rubber-stamping function: cf. R (Mercury Tax Group) v HMRC [2009] STC 743, per Underhill J at paragraph 52.[77]Whilst no reasons for making the order were recorded by His Honour Judge Kay QC, it is not, in my view, difficult to see why he must have concluded that the two particular statutory criteria had been met. The order (see paragraphs 27 and 28 above) indicates that he had read Ms Ewing’s statement. There was material in that statement from which it could reasonably have been inferred that there were substantial assets within the jurisdiction that arguably represented the proceeds of crime (albeit crime committed abroad), that there was a legitimate purpose in investigating that matter, that information provided in compliance with the order would be likely to be of substantial value to the investigation and that it was in the public interest for the information to be provided. In one sense, the last three matters derive largely from the first: if it is the policy of the Act that this country should not be a safe haven for the proceeds of crime wherever the crime may have been committed, then those three inferences are easily drawn in most cases. To that extent a fairly short assertion in the particular context is not out of place. Nonetheless, that comment should not be taken as a green light to being too sparing with the information provided in support of the application.[78]Overall, it seems to me that Ms Ewing’s witness statement contained sufficient material to justify making the order in the circumstances of this case and I can see no grounds for setting aside the order.[79]Since that is my conclusion the other matters raised by Miss Montgomery can be dealt with quite shortly. First, since there was, in my view, jurisdiction to make the order, I do not see how it could be said that any residual discretion that Judge Kay possessed (which the word “may” in section 357(1) plainly gives) was wrongly exercised by the making of the order. Second, the question of submission to the jurisdiction does not arise. If there was no jurisdiction at all to the making of the order, I do not see how any conduct of the Respondents thereafter could, by agreement or concession, confer jurisdiction on the court to make the order (see, e.g., Baygreen Properties Ltd v Gill [2002] EWCA Civ 1340). Had that issue arisen, I would not have concluded that what Mr Perry’s solicitors did on his behalf once the existence of the order had been revealed amounted to an unequivocal submission to the jurisdiction.

General conclusion

[80]It follows, therefore, that the challenge to the order made by Judge Kay fails and, accordingly, so too does the challenge to the information notices issued pursuant to it. This application will, therefore, be dismissed.

Concluding observations

[81]Although I have reached the conclusion I have, I think I should express some marginal reservations I have about the current practice of applying to a judge for a disclosure order purely “on the papers” in a case that raises the kind of considerations that this case does.. I understand the general practice was agreed some years ago and reflected what was perceived to be a convenient way of dealing with such applications, the judge to whom the application is made being able to raise any queries about the proposed order with SOCA which would be responded to either orally or in writing. It may well be that the practice is entirely acceptable in many cases and has worked well. However, a difficult case such as the present case does raise the issue of whether it is a practice that is always appropriate.[82]A disclosure order is itself an intrusive order and is a precursor to an even more intrusive obligation, namely, that of being required to furnish information under an information notice. In Director of the Assets Recovery Agency v Creaven [2006] 1 WLR 622, Stanley Burnton J, as he then was, concluded that a claim for a disclosure order was sui generis and a statutory creation of a special kind that was neither a traditional in personam claim nor a traditional in rem (or proprietary) claim. That of itself makes it unusual. Miss Montgomery drew my attention to what the Parliamentary Under-Secretary of State for the Home Department (Mr Bob Ainsworth MP) said during the Committee stage of the Proceeds of Crime Bill on 29 January 2002. It was in these terms:
"The Government have decided to limit the use of disclosure orders in England, Wales and Northern Ireland to the director of the agency. The director is a specific post set up and operated exclusively under the Bill. ... Although disclosure orders will not be the director's first port of call, we envisage that there will be circumstances in which they will provide information that is absolutely vital to the building of a case for bringing civil recovery proceedings. ... The order is, of course, a potentially intrusive power ... and the Bill therefore contains a number of conditions to ensure that it will be used when appropriate and proportionate to the investigation. ...One of the requirements for making an order is that there are reasonable grounds for believing that the resulting information is likely to be of substantial value to the investigation. We do not anticipate that disclosure orders will be sought unless other powers—such as production orders—have already been sought or would demonstrably not be appropriate or sufficient to obtain the required information. That would be one of the points that the judge would be expected to consider, in respect of proportionality, before approving a disclosure order."
[83]If one compares the procedures adopted in respect of other orders that potentially intrude significantly into the lives of individuals, the procedure normally involves an oral application before a judge, the interchanges between the judge and counsel being recorded and such reasons, if only brief, that the judge gives for the making of the order are also recorded. In the criminal context where the Crown seeks permission not to disclose material that is otherwise discloseable on the grounds of public interest immunity, an application is made by counsel to the judge in Chambers where the proceedings are recorded. In some criminal cases (and others), arrangements are made for special counsel to be briefed. In the civil setting, ex parte applications for freezing orders and associated disclosure orders are attended by counsel or solicitor-advocates and a record is made of what occurs. Not merely is a record made for future reference should it become necessary, but the presence of a representative on behalf of the applicant enables the judge to raise any issues and concerns that the judge may have about what is proposed. That facility does not readily present itself when a “papers only” application is made. Of course, a judge may decline to deal with the application in that way and invite the presence of the applicant and its representatives, as the present practice apparently envisages. However, there may be an understandable reluctance, when large sums of money which may represent the proceeds of crime are involved, not to make the order sought immediately because of a perception that delay might in some way result in the dissipation of those assets. In this case Judge Kay was led to believe that the “investigation will continue to be fast paced” (see paragraph 73 above). This is the kind of indication that may operate as an incentive to make the order sought.[84]I merely raise for consideration whether the present practice should govern every application made for a disclosure order or whether, following consultation, there may be some cases where an oral (albeit ex parte) application to a High Court Judge, with SOCA’s legal representative and the maker of the witness statement attending, is thought to be the better course.[85]However, notwithstanding those comments, I am satisfied that the Respondents have not been disadvantaged by the procedure adopted in this case and also, for the reasons given, that there are no grounds for impugning the order made by Judge Kay. Accordingly, as I have already indicated, this application will be dismissed.

order

“IMPORTANT NOTES TO THE RECIPIENT OF A NOTICE UNDER A DISCLOSURE ORDER 1. You should read the terms of this order very carefully. You are advised to consult a solicitor as soon as possible. 2. A person commits an offence under section 359(1) of the Proceeds of Crime Act 2002 if, without reasonable excuse, he or she fails to comply with a requirement imposed on him or her under a Disclosure Order, which could result in prosecution, imprisonment and/or a fine. 3. A person commits an offence under section 359(3) of the Proceeds of Crime Act 2002 (which could result in prosecution, imprisonment and/or a fine) if, in purported compliance with a requirement imposed on him or her under a Disclosure Order, he or she -(a) makes a statement which he or she knows to be false or misleading in a material particular; or(b) recklessly makes a statement which is false or misleading in a material particular. 4. It is an offence under section 342 of the Proceeds of Crime Act 2002 to prejudice a civil recovery investigation which is being or is about to be conducted by making a disclosure about it or by tampering with documents relevant to the investigation. You should not therefore falsify, conceal, destroy, or otherwise dispose of, or cause or permit the falsification, concealment, destruction or disposal of, relevant documents, nor disclose to any other person (including your client(s) or customer(s)) information or any other matter which is likely to prejudice any civil recovery investigation. The penalty for this offence on summary conviction is imprisonment for six months or a fine or both and on conviction on indictment of five years imprisonment or a fine or both. 5. The warnings contained under this heading “Important Notes” do not constitute a criminal caution, nor do they have the consequence of one. 6. If anyone other than [names of relevant officers at SOCA with conduct of this investigation] contacts you about the civil recovery investigation being conducted by SOCA, you should report this to SOCA immediately. 7. Although this order does not require you to answer questions, provide information, or produce material which consists of items subject to legal professional privilege, or which are excluded material, this order does, however, take precedence in spite of any restriction on the disclosure of information, however imposed. This order does, therefore, take precedence over any contractual duties of confidentiality and the common law duty of confidence. 8. If you have any doubts or concerns about this order you should seek legal advice. 9. The name, address and telephone number of the person dealing with this case on behalf of SOCA is ….” TO THE RECIPIENT OF A NOTICE UNDER A DISCLOSURE ORDER The evidential background to SOCA’s application order: see section 241(2)(a).