Serious Organised Crime Agency v Perry & Ors

This appeal concerns the power of the Serious Organised Crime Agency (“SOCA”) to give information notices under Part 8 of the Proceeds of Crime Act 2002 (“the Act”) on potential informants not present in the UK.

In October 2007 Mr Perry was convicted in Israel of a number of criminal offences. He was sentenced to 12 years imprisonment and fined approximately £2.6 million. In February 2009 the Israeli Supreme Court upheld the conviction, but reduced the sentence to 10 years. A further appeal was heard by that court in March 2010, but judgment has not yet been handed down. The offences, which are described in more detail by the judge, related to Mr Perry’s involvement in a scheme designed to enable Israeli nationals to obtain pension benefits from a treaty between Israel and Germany. Some 30,000 people were registered with the scheme.

SOCA became aware of funds totalling approximately £14m held in two bank accounts in London (Hoare’s Bank and Safra Bank), in the names of Mr Perry or members of his family. (Although four members of the family, including Mr Perry himself, are parties to the proceedings, no material distinction has been drawn in argument between the different members. For convenience in what follows I will refer as appropriate either to “Mr Perry” or to “the family”.)

On 8th August 2008 SOCA obtained from the High Court a disclosure order under section 357 of the Act. The next step was SOCA’s application for a property freezing order, which on 20th October was sent to the family, at Mr Perry’s London address, 39 South Street. In response, their solicitors Asserson Law Offices (“Asserson”) wrote confirming that they were instructed by the family and had been given copies of the documents “served on them at their London address.” A consent order was agreed providing for the adjournment of the application in return for undertakings to freeze these monies.

The first information notices were sent on 17th November 2008, again to 39 South Street, asking for certain information and documents relating to the Hoare’s funds. Asserson’s response confirmed that they had received the notices and were acting for the family members. They also indicated that the issues were matters for Mr Perry, rather than other members of the family, and that he remained “committed to assisting SOCA with its inquiry”. Some documents were provided, but it was agreed that further compliance could be postponed pending the outcome of Mr Perry’s appeal in Israel, and there would be a review at the end of January 2009.

SOCA contacted Asserson again in early February 2009, having learnt that Mr Perry’s appeal against conviction had been dismissed. On 23rd February 2009, SOCA sent two further information notices (relating to the Safra Bank funds, one requiring information about assets in other countries) to 39 South Street, copies being sent to Asserson. In their reply dated 26th February 2009, Asserson for the first time raised a question as to the jurisdiction of the Court. Following service of an application for a freezing order in respect of the Safra Bank funds, a similar consent order was made.

On 3rd March 2009, the family began the present proceedings to set aside the disclosure order and the notices under it, on the grounds that there was no jurisdiction to make such orders for the purposes of seeking information from persons not “domiciled, resident or present” in the UK (cf s 243(2), where that phrase occurs in the context of service of claims).

The application was dismissed by Foskett J, in a judgment dated 30th July 2009. He concluded that, provided there were grounds for believing that property obtained through unlawful conduct had been brought into the jurisdiction, that was sufficient foundation for both the disclosure orders and the notices under them. He added that, if a closer connection were needed -

“… 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.” (para 67)

He gave permission to appeal on the basis that the case raised an issue of general importance.

In this court, following a late application to amend the notice of appeal, the jurisdiction to make the disclosure order is no longer in issue. We are concerned solely with the power to issue notices under the disclosure order. Mr Jones QC, who now appears for the family (not having appeared below), accepts that, where assets have been identified within the jurisdiction which are reasonably believed to be within the scope of Part 5, there is power to make a disclosure order. He submits, however, that a notice under such an order may only be given to a person physically within the jurisdiction. The appeal has been argued on the common assumption that, notwithstanding the connections referred to above, and the initial stance taken by their solicitors, none of the appellants was physically within the jurisdiction at the relevant time.

Mr Peto QC for SOCA, while maintaining a formal objection to this late amendment, accepted that the issues were of general importance. Accordingly he did not object to our hearing full argument, deferring the question whether to allow the amendment until judgment.

As the case has been presented, we have been asked to consider two distinct issues:

The Proceeds of Crime Act 2002 replaced a number of earlier statutory schemes providing for confiscation of proceeds of crime. Part 2 deals with “confiscation orders” made following conviction in the domestic courts. Part 5 is concerned with civil recovery proceedings, which are directed at “recoverable property” derived from “unlawful conduct”. For a general description of the purpose of Part 5 of the 2002 Act, I refer to my own judgment in Olupitan v Director of Assets Recovery Agency [2008] EWCA Civ 104:

“8.

Part 5 of POCA 2002 created a new statutory scheme for the recovery in civil proceedings of property obtained through unlawful conduct. Unlike confiscation proceedings under Part 2, the powers are exercisable regardless of any criminal proceedings (s 240(2)). Examples are given in the Explanatory Notes:

"… civil recovery and cash forfeiture proceedings may be brought whether or not proceedings have been brought for an offence in connection with the property. Cases where criminal proceedings have not been brought would include cases where there are insufficient grounds for prosecution, or where the person suspected of the offence is outside the jurisdiction or has died. Cases where criminal proceedings have been brought may include cases where a defendant has been acquitted, or where a conviction did not result in a confiscation order." (para 290)

Section 240(1) gives power to the Director to recover in civil proceedings property which ‘is, or represents, property obtained through unlawful conduct’ (s 240(1). Property so obtained is referred to as ‘recoverable property’ (s 304(1).” (para 8)

As Mr Peto points out, the statute contains a number of indications that the impact of Part 5 itself is not confined to the UK, for example:

Since 2002, the Act has been amended on a number of occasions, both before and after the events in issue in this case. In particular, amendments have been made to reflect the abolition of the former Assets Recovery Agency and the establishment of Serious Organised Crime Agency. Neither party suggested that the scope of the jurisdiction, at least for the purposes of this appeal, has been materially affected by the amendments, although some have been relied on as supporting aspects of the rival submissions. In what follows I will refer, unless otherwise indicated, to the law as it stood at the time of the notices (November 2008-February 2009).

The disclosure order provisions come in Part 8 of the Act, entitled “Investigations”. Part 8 applies to investigations under both Part 2 (“Confiscation investigations”) and Part 5 (“Civil recovery investigations”).

A civil recovery investigation is defined as an investigation into—

“(a)

whether property is recoverable property or associated property,

(b)

who holds the property, or

(c)

its extent or whereabouts.” (s 341(2))

These powers are available at the preparatory stage only. It is specifically provided that investigations are no longer treated as “civil recovery investigations” for these purposes, once proceedings for a recovery order have been started or an interim receiving order has been made in relation to the property in question (s 341(3)). It is an offence to make a disclosure likely to prejudice an investigation, or to falsify, destroy or dispose of documents relevant to the investigation (s 342).

Chapter 2, which applies to England and Wales and Northern Ireland, deals with the various forms of orders available from the court. (Chapter 3 contains corresponding provisions for Scotland). In confiscation investigations, the powers are given to Crown Court judges; in civil recovery investigations, to High Court judges (s 343). The provisions are grouped under the following headings:

Section 357 is directly relevant. It provides for the making of, and the effect of, a “disclosure order”:

“(1)

A judge may, on an application made to him by the relevant authority, make a disclosure order if he is satisfied that each of the requirements for the making of the order is fulfilled.

…

(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 an appropriate officer 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 appropriate officer to give to any person the appropriate officer 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 appropriate officer concerned 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.”

Section 358 sets out the requirements for making a disclosure order:

“(2)

There must be reasonable grounds for suspecting that—

…

(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.”

By section 359 it is an offence (punishable by up to 6 months imprisonment) to fail to comply “without reasonable excuse” with “a requirement imposed… under a disclosure order”, or knowingly to give false information in purported compliance with a requirement under such an order. Section 360(1) provides that a statement made by a person in response to a requirement under a disclosure order “may not be used in evidence against him in criminal proceedings”. Section 361 provides protection in respect of “privileged” questions, information or material (defined by reference to the scope of “legal professional privilege in proceedings in the High Court”), and “excluded material” (defined in section 379, by reference to the Police and Criminal Evidence Act 1984). Generally, it is provided that:

“A disclosure order has effect in spite of any restriction on the disclosure of information (however imposed).” (s 361(6))

Section 362(1) provides that an application for a disclosure order may be made “ex parte to a judge in chambers”. The section also provides (in relation to confiscation investigations, but not civil recovery investigations) for “any person affected by the order” to apply to the court to “vary or discharge” the order. It seems that similar statutory provision was not necessary for civil recovery investigations, because procedural matters, including the right to apply to vary or discharge an order made ex parte, are governed by the Civil Procedure Rules.

The CPR have been supplemented by a “Practice Direction – Civil Recovery Proceedings”, published as a CPR update in February 2003 (see White Book - para 3K-1). Article 15 of that Direction, which deals with Disclosure Orders, provides that:

The order in this case was in what I understood to be a standard form. It named the applicant as SOCA, and the respondents as the four family members and –

“any other individual or entity specifically associated to [the four family members] and property identified as relevant to the civil recovery investigation…”

These words I take to be designed to pre-empt any practical limitation implied by the practice direction (15.1).

The body of the order began with a “penal notice”, indicating that non-compliance with “the terms of this order” might be treated as contempt of court, for which “you may be imprisoned, fined or have your assets seized”. It then recited that, the court having been satisfied as to the requirements for making the order:

“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….

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.

…

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.”

There then followed a passage, headed “Important notes”, addressed to “the recipient of a notice under a disclosure order”. The notes warned of the potential criminal consequences under sections 359 (non-compliance with a notice) and 342 (prejudicing the investigation); and indicated that, subject to legal professional privilege, the order took precedence “in spite of any restriction on the disclosure of information, however imposed” (thus echoing s 361(6): see above).

As Mr Jones correctly points out, a disclosure order made pursuant to s.357 of POCA does not of itself order anyone to disclose anything. Rather it confers authority on an appropriate officer, by notice in writing, to require persons to answer questions, provide information or produce documents, as the case may be. The intention seems to be that, once made, the order can be used by the officer to pursue the investigation without need for further recourse to the court. Thus paragraph 130 of the Code of Practice states:

“Once a disclosure order has been made, members of staff of SOCA ... may use the extensive powers set out in section 357(4) of the Act throughout their investigation. Thus, unlike the other orders which have to be applied for separately on each occasion, a disclosure order gives continuing powers for the purposes of the investigation.”

Mr Jones questions whether the standard form of order is accurate in warning of the risk of contempt proceedings. Such proceedings, he submits, are available only where “a judgment or order” requires the doing of an act “within the time specified in the judgment or order” (Ord 45.5(1); see R (Bates) v Chief Constable of Avon [2009] EWHC 2293, where committal proceedings failed because no time for compliance was given in the order). In this context (as contrasted, for example, with that of a “production order” under section 345), it is not the order itself which requires the doing of any act, nor does it set a time for compliance. Although it is unnecessary to rule on the point, I see some force in Mr Jones’ submission.

The respective positions of the parties can be shortly stated. Mr Jones relies on the familiar principle (confirmed at the highest level) that:

“Unless the contrary intention appears,... an enactment applies to all persons and matters within the territory to which it extends, but not to any other persons and matters.” Bennion on Statutory Interpretation (5th Ed, 2008), section 128(1), (emphasis added).

The provisions relating to disclosure orders, in his submission, contain no indication of such contrary intention. If they were permitted to have extra-territorial effect, there would be no limit on those who might be affected, regardless of whether they have any connection with this country, or with the unlawful conduct in question. He relies also on the relative informality of the process by which notices are given, and the fact that non-compliance is made a criminal offence (cf Air-India v Wiggins [1980] 1 WLR 815, affirming the presumption that an offence-creating statute is not intended to cover conduct outside the jurisdiction).

He points also to the practical difficulties of applying the provisions to foreign entities or individuals, for example:

Mr Jones supports these submissions in respect of disclosure orders, by a detailed analysis of the other forms of remedy available under Part 8, with a view to showing that in most of them some territorial limitation is necessary to give them reasonable effect.

On the other side, Mr Peto relies on the indications that the Part 5 of the Act is intended to have extra-territorial effect (see para 13 above). Where foreign residents have chosen to bring to this country assets, apparently derived from unlawful conduct abroad, it would be absurd if they could not be questioned about them, merely because they happened to be out of the country at the time the notices were given. The defence of “reasonable excuse” would ensure that foreign citizens could not be penalised unreasonably. Further, SOCA is a public body, and is subject to the ordinary public law duty (controllable by judicial review) to exercise its powers reasonably for the purposes for which they were granted. In any event, the court has control of the form of the disclosure order, and, if the power is abused, those affected can apply to vary it so as to include appropriate restrictions on its ambit.

The general principle stated by Bennion is not in doubt, although its scope is heavily dependent on the particular statutory context. An authoritative statement is that of Lord Scarman in Clark (Inspector of Taxes) v Oceanic Contractors [1983] 2 AC 130, 145:

“the general principle...is simply that, unless the contrary is expressly enacted or is 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.”

The importance of the context is even clearer in Lord Wilberforce’s statement in the same case (at p 152) that the principle was:

“really a rule of construction of statutes expressed in general terms, and which...requires an inquiry to be made as to the person with respect to whom Parliament is presumed, in the particular case, to be legislating. Who, it is to be asked, is within the legislative grasp, or intendment, of the statute under consideration?” (emphasis added)

Further, the question is to be answered, not simply by reference to the scope of the statute as a whole, but by looking “to the policy of the legislature in enacting the section in question” (per Peter Gibson J, Re Seagull Manufacturing [1993] Ch 345, 354F).

Masri, which is the authority principally relied on by Mr Jones, is a recent application of the principle at the highest level. It was held that CPR 71.2 did not enable a judgment creditor of a Lebanese judgment debtor to obtain an order for an officer of the debtor company, domiciled in Greece, to be examined in England in respect of the company’s assets. It is to be noted that the issue on which the appeal succeeded was relatively narrow. The House rejected the argument that the enabling statute itself (Civil Procedure Act 1997 s 1) did not authorise a rule extending to persons abroad. The 1997 Act was to be taken as “endorsing the manner in which the rule-making power in respect of extra-territorial jurisdiction has been exercised over the years” (para 14). On the other hand, the rule itself was not expressed in terms sufficiently clear to achieve the result desired by the claimant.

Lord Mance, in the leading speech (paras 19-23), described two earlier authorities as lying on either side of the instant case: Re Tucker [1990] Ch 148 and Re Seagull (above). In the former this court set aside an order under the Bankruptcy Act for examination before the English court of the debtor’s brother, a British subject resident in Belgium. The statute applied to “any person whom the court may deem capable of giving information regarding the debtor”; but it provided a specific power to order the examination “in any other place out of England”, of a person who “if in England” would be liable to be brought before the court under the section (s 25(6)). Those words were regarded as a conclusive indication that there was no power to compel examination in England of a person who was out of England at the relevant time.

In the latter (Seagull), the court upheld an order for the examination in England of a former director living in Alderney. The Insolvency Act authorised public examination of a “narrower category of persons” (in Lord Mance’s words) than in Tucker, that is anyone who had been an officer or administrator of the insolvent company. It was held that, in the context of the “calamitous end” of a company, the obvious intention was that those responsible for the company’s affairs should be subject to investigation, and that they could not escape liability simply by leaving the jurisdiction.

Lord Mance, in the leading speech, mentioned three factors which pointed against extra-territorial effect in Masri:

He concluded that CPR 71 “was not conceived with officers abroad in mind”, and that, although it contained no express exclusion, there were lacking “critical considerations which enabled the Court of Appeal in In re Seagull to hold that the presumption of territoriality was displaced” (para 26).

In my view, as in Masri, some limitation on the extra-territorial scope of a disclosure order must be implied. It is not enough for Mr Peto to point to the extra-territorial aspects of the Part 5 jurisdiction in other respects. It is necessary to consider the particular “enactment”, in this case section 357, to see to what extent the presumption against extra-territoriality is displaced. Looking at the three factors mentioned by Lord Mance in Masri, it is true that, in contrast to that case, there is a strong public interest in this statutory regime. However, on the other side, one notes the very wide scope of the provision, applying to “any person” thought to have “relevant information”; and the relative “informality” of the procedure for serving notices, depending solely on the judgment of the relevant officer.

The fact that non-compliance is a criminal offence is a further factor pointing against general extra-territoriality. Parliament is unlikely to have intended that, simply on the say-so of a SOCA officer, a foreign entity (for example, a bank) with no direct connection with this country, and with no record of involvement in unlawful activity, could be required to submit to oral examination and provide documents, subject to criminal penalties in this country if it failed to do so.

Practicality of enforcement is another relevant factor (see Masri at para 22). Mr Peto suggests, echoing the words of the order, that sequestration of assets in this country might be a practical alternative to criminal proceedings against a person out of the jurisdiction. However, as already noted, there is at least some doubt as to whether committal proceedings, including sequestration of assets, would be available as a remedy for non-compliance. This, as Mr Jones submits, may well have been a reason why in this context (as compared for example to that of production orders) a specific offence was created. The difficulty of enforcing criminal liability against a foreign person or entity is another factor pointing against general extra-territorial effect.

As noted already, Mr Peto’s answer is that the power under section 357 is not unlimited, but is subject to the control of the court, by its power to vary or discharge the order, which he interprets as including power to impose restrictions. This is not needed in the present case, where, as the judge found, the service of the notices on the family was wholly justified, having regard to their interest in the relevant assets, and Mr Perry’s connections with this country. In a more deserving case, the court’s power to vary the order on the application of anyone affected by it provides ample power to prevent abuse where appropriate.

I do not find that a satisfactory answer. Although the court has power to discharge or vary the order, that arises from the ordinary jurisdiction of the court under the CPR, in relation to an order made without notice to the other side. There is nothing in the Act to suggest that the court has power, whether in the original order or by variation, to impose restrictions on the categories of person to whom notices are given. It has discretion whether to make an order, but the requirements for doing so, and the form of the order itself, are prescribed by the statute. If Parliament had intended the extraterritorial effect of the order to be controlled by restrictions in the order itself, one would have expected it to have so provided.

At the time of making the order, the court needs to know sufficient about the expected lines of inquiry to satisfy itself that the information sought is likely to be “of substantial value” to the investigation and in the public interest. But the section gives it no control over the persons on whom notices are to be served, nor of the directions of inquiry which SOCA may decide to pursue under it. I see no basis for reading into the section a requirement for SOCA to return to court as soon as its inquiries lead it to a foreign source of information. If that is not a requirement for the initial order, it is hard to see why it would be appropriate for the court to introduce it by a later variation, on the application of a particular foreign recipient. If the disclosure order itself is valid, and the notice is reasonably directed to obtaining information under it, it is difficult to see what legal grounds there would be for variation or discharge.

That is not the end of the debate. There is a danger in attempting to provide general, abstract answers to questions which it is unnecessary to resolve for the purpose of the case before the court. It is noteworthy that the majority in Clark v Oceanic Contractors declined to follow the broader argument submitted by the Revenue, preferring a “safer” route (p 161D) directed to the facts of the case.

It is useful at this point to consider again the manner in which the appeal has come to us. Although the proceedings began as an application to set aside the order, that is not their present objective. We are now concerned simply with the legality of the notices, given under a disclosure order which is now accepted as validly made, because it related to property in this country (although it included a general reference to “any matter” relevant to the purposes of the investigation).

I do not think this change can be regarded as a matter of form only, since procedure and substance may be closely linked. As Mr Peto observes, even on Mr Jones’ own submissions, the current procedure is inappropriate for the relief now sought. In his skeleton Mr Jones noted the three types of action available to a person in receipt of a notice who objects to providing the information sought:

Applying ordinary judicial review principles, it is difficult to see any grounds for challenging the notices, whether on general grounds of unreasonableness, or because they were not validly “given”. The notices seek information which is undeniably relevant to the investigation of assets which, by concession, are properly the subject of the disclosure order, and in which the recipients are interested. They were sent to them at an address within the jurisdiction which was acknowledged by them (through their solicitors) as “their London address”, and at which (as Mr Jones accepts) they would come to their attention.

Mr Jones says that is not enough. As he puts it, the question is one of jurisdiction: can a valid information notice be given to a person who is out of the jurisdiction by posting it to an address within the jurisdiction?

At this point the two issues identified at the beginning of this judgment overlap. Neither party seeks to argue that the requirement for a notice to be “given” has a special meaning, whether by analogy with the service provisions of the CPR, or otherwise. On the facts of this case, it seems to me clear that the notices were, in the ordinary use of language, “given” to the family members, and accepted by them. The question then arises whether there is any separate jurisdictional restriction. In other words, is there any reason why persons who are reasonably considered to have an interest in property validly subject to a disclosure order, and who have a sufficient presence within the jurisdiction for a notice to be effectively given to them, should be treated as outside the “legislative grasp” of the statutory scheme?

As a matter of common sense, it is difficult to see why mere presence in or absence from the country at the time of sending or delivery of the notice is the critical factor. For example, a person normally resident at an address in this country could not sensibly seek to deny that the notice had been “given” to him at that address, merely because he happened to be out of the country at the time (for example, on a business or holiday trip).

I do not overlook the potential problems of enforcement in some cases, particularly if Mr Jones is right as to the unavailability of committal procedure. (Similar arguments were made in Clark v Oceanic Contractors: p 146E-F.) Issues of this kind may also arise in relation to those admittedly within the scope of a valid notice. Such problems will no doubt be factors which SOCA will need to take into account in deciding on the utility of using this procedure in particular cases. However, in this case, as I understand it, the issue of jurisdiction has been taken as one of pure principle. Subject to that, Mr Perry, through his solicitors, has made clear his commitment to assisting SOCA with its inquiry.

For these reasons, I would hold that the judge’s decision was correct, and that, even in their modified form, the appellants’ arguments provide no reason to differ from his conclusion.

Although I have arrived at an answer to the question which arises directly in this case, I am conscious that I have left many others unanswered. Mr Jones’ painstaking analysis of the different forms of order under Part 8 shows a number of apparent gaps which may need to be filled by judicial interpretation if and when they arise. There is little in the Act to guide the court. We have been referred, by way of analogy or illustration, to a number of provisions, some tantalisingly obscure, which address various cross-border issues. For example:

I mention these examples for completeness, rather than for any significant help they provide in the present case, since they point in different directions and none is conclusive. They are symptomatic of legislation which is evidently designed to have effects extending beyond the UK borders, but does little to spell out the practical implications of this in relation to the different forms of action available to the enforcement agency.

For the above reasons, I have concluded that, even in its modified form, and in spite of Mr Jones’ impressive advocacy, the appeal must fail. The information notices were validly made, and validly given to Mr Perry and his family. This conclusion makes it unnecessary to rule on the formal objection made by Mr Peto to use of the present proceedings (rather than judicial review) for a challenge to the notices alone. I would grant permission for the amended grounds of appeal, on the basis simply of the general importance of the issues raised, but dismiss the appeal.

I have reached a different conclusion from that so clearly expressed by Carnwath LJ. Although his conclusion has undoubted attractions to it, I do not think that it is open to us on the proper construction of s.357 of the 2002 Act, the source of the power to give an information notice such as SOCA purported to give to Mr Perry and his family.

Carnwath LJ has cited at [27] the general principle stated in Bennion, that “[u]nless the contrary intention appears … an enactment applies to all persons and matters within the territory to which it extends, but not to any other persons and matters”. As Lord Mance said in Masri v Consolidated Contractors Int (UK) Ltd (No.4) [2010] 1 AC 90 at [10], whether and to what extent the principle applies in relation to foreigners outside the jurisdiction depends ultimately upon who is “within the legislative grasp, or intendment” of the relevant provision (those are the words of Lord Wilberforce in Clark v Oceanic Contractors Inc [1983] 2 AC 130, 152, cited by Carnwath LJ at [33] above); and to this a nuanced answer may be given. In this case, however, there seem to me to be strong pointers that persons outside the jurisdiction are not within the legislative grasp or intendment of s.357, and insufficient to support a contrary intention. Nor do I think that the jurisdictional issue can be avoided or dealt with on the basis put forward by Carnwath LJ at [50]. His solution seems to me to be a nuance too far.

The pointers against reading s.357 as extra-territorial in scope are numerous. Carnwath LJ has referred to many of them at [39]-[44], where he accepts that some limitation on extra-territorial scope must be implied. Although the making of a disclosure order is a matter for the court, the power to give information notices pursuant to an order once made is a power vested in officials of SOCA. It is moreover a broad discretionary power, whereby any person considered to have relevant information may be required to answer questions at a time and place specified in the notice, to provide information by a time and in a manner so specified, and to produce documents at or by a time and in a manner so specified; and the procedure for the giving of notices is itself very informal. I agree with Carnwath LJ that the powers relating to the making, variation and discharge of the disclosure order itself do not enable the exercise of effective judicial control over the persons to whom notices are given (nor indeed over the detailed contents of the notices given). Judicial review is available in principle but must be regarded as very much a long stop. One should in my view be very slow to find that Parliament intended to confer a broad discretion on officials to give notices of this kind to persons anywhere in the world. That point is strengthened by the fact that, by s.359, a person commits an offence if without reasonable excuse he fails to comply with a requirement in such a notice. The difficulty of enforcement against a person outside the jurisdiction is another factor: here, too, I agree with the doubts expressed by Carnwath LJ about the availability of contempt proceedings and associated remedies.

In addition to all those matters, I accept Mr Jones’s submission that the focus of the related provisions in ss.360-361 is on proceedings within the jurisdiction and that there is nothing in them to support a broader territorial scope to the power to give information notices. By “jurisdiction” I mean the United Kingdom, not simply the jurisdiction of the courts of England and Wales. Part 8 of the 2002 Act confers powers on the courts of England and Wales, Northern Ireland and Scotland (albeit there are some differences of detail), and s.443 provides for orders made by a court in one part of the United Kingdom to be enforced in other parts of the United Kingdom. The relevant provisions of the Proceeds of Crime Act 2002 (Investigations in different parts of the United Kingdom) Order 2002, made pursuant to s.443, proceed on the premise that notices can lawfully be given to persons under the statute to persons in other parts of the United Kingdom. It seems to me that the power to give information notices is plainly intended to extend that far. But the very fact that express provision is made for enforcement in other parts of the United Kingdom underlines the lack of any enforcement mechanism in respect of persons outside the United Kingdom and tends to support the view that the power to give information notices is not intended to extend to persons outside the United Kingdom.

I also accept Mr Jones’s submission that the various other powers in Part 8 of the 2002 Act have a territorial focus: production orders (s.345), orders to grant entry (s.347), search and seizure warrants (s.352), customer information orders (s.363) and account monitoring orders (s.370) – subject, in the case of the last two categories of order, to some complexities arising out of the definition of “financial institution” in s.416(4). If, within that context, the power to give information notices under s.357 was intended to have an extra-territorial scope, I would expect clear words to that effect.

Mr Jones also pointed to the availability of letters of request to obtain evidence outside the United Kingdom, and submitted that this, rather than giving information notices to persons outside the jurisdiction, was the method by which Parliament intended that information should be obtained from abroad for the purposes of investigations under Part 8. In relation to confiscation investigations, the Assets Recovery Agency had power under s.376 of the 2002 Act as originally enacted to apply to a judge for the issue of a letter of request. That section was repealed as from 31 March 2008 on the abolition of the Agency and the transfer of powers to SOCA; but confiscation investigations take place within the context of criminal proceedings and it appears that SOCA can now ask the prosecuting authority to make the request. In relation to civil recovery investigations, which are civil in character, there are specific provisions in CPR 34.13A for a party to existing or contemplated proceedings under Part 5 to apply to the court for the issue of a letter of request. Mr Peto seemed inclined to distinguish confiscation investigations on the basis that criminal proceedings are territorial in nature and it is necessary to engage the co-operation of foreign authorities for the obtaining of evidence abroad. But the power to make a disclosure order under s.357 applies both to confiscation investigations and to civil recovery investigations; and it would be very surprising if information notices pursuant to a disclosure order were limited to persons within the jurisdiction in the case of the former but could be given to persons outside the jurisdiction in the case of the latter. Mr Peto also pointed to the serious deficiencies of letters of request as an alternative to information notices. That may be so, but in my view it is not a strong point in favour of construing s.357 in the way for which SOCA contends.

Against those various considerations, account has to be taken of the various provisions of Part 5 on which Mr Peto relied as indicators of the extra-territorial scope of the civil recovery scheme: in particular, the definition of “unlawful conduct” as including conduct outside the United Kingdom (s.241(2)), the fact that the claim form can be served without leave on the respondent “wherever domiciled, resident or present” (s.243(2)), and the definition of “property” as “all property wherever situated” (s.316(4)). His submission is that Part 8 should be approached in the same way: the effect of s.341(2) and the relevant definitions is that a civil recovery investigation may include investigation of whether property is situated abroad, whether it was obtained by criminal conduct abroad and whether it is held by persons abroad; and, against that background, s.357 should be construed as conferring a power to give information notices to persons abroad.

Looking at the position overall, it seems to me that there is a clear balance in favour of construing s.357 as empowering the giving of information notices only to persons within the jurisdiction. I accept that the arguments do not go all one way, but there is in my view insufficient to displace the strong pointers in favour of that construction and to establish a contrary intention.

There is, as I understand it, no suggestion that Mr Perry or his family were present in the jurisdiction either at the time when the information notices were sent or at any time thereafter. It follows, if I am correct in my construction of s.357, that the notices were not validly given to them. I do not accept that, in the absence of specific legislative provision, an information notice is validly given to a person outside the jurisdiction by posting the notice to that person’s “London address” (whatever precisely that may mean in this case – the facts are unclear). In the case of Mr Perry and his family, if there was no power to give an information notice to them by posting it directly to them in Israel, there cannot have been a power to give a notice to them by posting it to an address in London for forwarding to them in Israel or communication of its contents to them in Israel.

Carnwath LJ states at [50] Mr Perry and family “have a sufficient presence within the jurisdiction for a notice to be effectively given to them”, and he relies on that as a reason why they should be treated as within the legislative grasp of the statutory scheme. I agree that a notice was “given” to them, in that it was sent on to them or its contents were communicated to them. But I do not accept that this avoids the jurisdictional issue or provides an answer to it. One still needs to ask whether the notice was validly given, and that depends in this case on the jurisdictional issue. One has to face up to the fact that Mr Perry and family were not (and have not subsequently been) within the jurisdiction. They have property here; they have an address here to which correspondence can be sent for their attention; they have other connections with the jurisdiction (see the passage from the judgment of Foskett J quoted at [8] above); but they are not present here.

It would of course have been open to Parliament to provide that notices under s.357 could be given to persons who, although outside the jurisdiction, have substantial connections with the jurisdiction or who meet some similar test, however precisely formulated. But Parliament did not do so. The language of s.357 is very general (“give to any person …”). The reference to “any person” must, as it seems to me, refer either to “any person, whether outside or within the jurisdiction” or to “any person within the jurisdiction”. I have explained why I believe the latter to be correct. I do not think that it is open to the court to read in more substantial qualifying language so as to construe the section as permitting notices to be given to some, but not all, persons who are outside the jurisdiction.

The example given by Carnwath LJ at [51] does not trouble me. Where a person is normally resident within the jurisdiction but is temporarily absent from it, a notice sent to his normal residence while he is away will be “given” to him, at the latest, when he receives it on his return.

It is necessary to address a technical procedural issue raised in the course of the hearing. The only way of challenging the validity of an information notice, as opposed to the disclosure order pursuant to which the notice is given, is by judicial review. As noted by Carnwath LJ at [46]-[47] and [56], that was not the procedure adopted in this case, since the proceedings began as an application under the statute to set aside the disclosure order. For my part, however, notwithstanding Mr Peto’s objection to the course taken on the appeal, I would be prepared to treat the proceedings as if brought by way of judicial review. If SOCA lacks the power to give an information notice to persons outside the jurisdiction, these notices were not validly given and the court can and should so declare.

For the above reasons I would allow the appeal and declare that the information notices in issue were not validly given.

In this case there is a large sum of money in an English bank. The account holder has from time to time resided here and carried on business here. He has access to lawyers here. You might think that he would be keen to release money from the freezing order which blocks it and that he might be keen to answer a few questions to do so. He does not seem willing to cooperate. Why not? No doubt implicitly acknowledging that the merits are against him, his answer is that the court has no jurisdiction to compel him to answer any questions about the source of the money. My Lords do not agree as to whether there is jurisdiction or not. Their judgments which I have read in draft reveal powerful arguments for and against. I prefer the views of Carnwath LJ.

For my part I take as a succinct expression of the test to be applied the opinion of Lord Wilberforce in Clark v Oceanic Contractors Inc [1983] 2 A.C. 130, 152:

“Who, it is to be asked, is within the legislative grasp, or intendment, of the statute under consideration?”

But I also note the next sentence of his speech:

“The contention being that, as regards companies, the statute cannot have been intended to apply to them if they are non-resident, one asks immediately - why not?”

To answer those questions it is useful to begin with identifying the purpose of the legislation. It is expressed in the Act itself. Section 240 introduces Part 5 of the Act dealing with civil recovery of the proceeds etc of unlawful conduct and it provides:

“240 General Purpose of this Part

(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.”

One notes immediately that unlawful conduct includes conduct which occurs in a country or territory outside the United Kingdom and is unlawful under the criminal law applying in that country or territory: see section 241(2)(a). One is accordingly struck by the extra-territorial reach of this statute. The purpose of the Act is, to quote from the report to the Cabinet Office, “Recovering the Proceeds of Crime: A Performance and Innovation Unit Report, June 2000” to “allow the recovery of unlawful assets held in the UK, but derived from crime committed overseas.” Organised crime and money laundering have cross-border implications. It is a global activity. The Act recognises its extra-territorial spread.

The ultimate sanction is a recovery order and proceedings may be taken against any person wherever resident, domiciled or present: section 243. There is a clear statement of legislative intent for the Act to have extra-territorial effect. Recovery orders are the culmination of the process and I have to ask myself this question: if the end result, the recovery order, bites those who are not domiciled, resident or present in the jurisdiction, why should not steps on the way do so as well?

The Court also has power to make the property freezing order (section 245A) and it may then make a receiving order under section 245E. These orders are obviously ancillary to the main relief. The receiver is then given this power under section 245F(4):

“The Court may by order require any person in respect of whose property the receiver is appointed to bring any documents relating to the property which are in his possession or control to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place them in the custody of the receiver.”

If the ultimate power of the Court to make a recovery order can operate extra-territorially, then the legislature must have intended the ancillary order like this receiving order to operate in the same way. The very fact that it is stated in parenthesis that the documents should be brought to a place in England and Wales is suggestive of the fact that they are being brought here from another jurisdiction by the party who himself not ordinarily susceptible to the jurisdiction of England and Wales.

There is, furthermore, it seems to me, not a great deal of difference between such an order and a production order made under Chapter 2 of Part 8 of the Act which deals with “Investigations”. Section 345 defines production orders as follows:

“(4)

A production order is an order either –

(a)

requiring the person the application for the order specifies as appearing to be in possession or control of the material to produce it to an appropriate officer for him to take away, or

(b)

requiring that person to give an appropriate officer access to the material,

within the period stated in the order.”

Once again it seems to me that similar orders should operate in a similar extra-territorial way.

Consider then the disclosure order made under section 357:

“(4)

A disclosure order is an order authorising an appropriate officer to give to any person the appropriate officer considers as 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.”

I can see no discernable difference between the purposes to be served by allowing the Receiver to require the production of documents or for the production to be made to an appropriate officer under a production order or under a disclosure order. The extra-territorial effect of Part 5 cannot be denied: I do not see why Part 8 should not operate in the same way. Consistency compels the conclusion that the same regime operates throughout the Act.

That a search and seizure warrant is unlikely to be made for the search of a property abroad is as much a recognition by the legislature of the ordinary rule of judging that one does not make an order which one cannot enforce as it does that this whole part of the Act does not operate extra-territorially.

The purpose of the Act is to combat cross-border unlawful conduct and I cannot accept that the legislature intended that SOCA should engage in this battle against international criminal activity with one hand tied behind its back. If SOCA knows where the account holder is, why cannot the appropriate officer visit him abroad and ask him a few direct questions? Answering Lord Wilberforce’s second question, “Why not?”, my answer is that there is no reason why the whole Act should not have extra-territorial effect and that Parliament must have so intended. I would therefore dismiss the appeal.