Introduction
Background
SOCA's appeal
O's appeal
Court of Appeal decision
Comment


Introduction

In Serious Organised Crime Agency v O'Docherty(1) the Serious Organised Crime Agency (SOCA) appealed the decision to grant the respondent (referred to as 'O') permission to apply to vary a property freezing order made against him. Permission had been granted following the Supreme Court decision in Perry(2) that a civil recovery order could be made only in respect of property within the jurisdiction. O also brought two appeals, seeking to reopen the refusal of permission to appeal the civil recovery order and the original order of committal. O argued that following Perry, the decision was based on an unlawful extension of the court's jurisdiction.

Background

In 2008 SOCA obtained, without notice, a property freezing order under Section 245A of the Proceeds of Crime Act 2002. In October 2011, having disposed of property in breach of the order, O was committed for contempt. In December 2011 judgment was given in the substantive action. The court found that O had been engaged in drug dealing and money laundering for over two decades and in the late 1990s had started transferring his assets (which were the proceeds of crime) from the United Kingdom to Spain, France, Switzerland and Dubai. The court granted a civil recovery order in respect of the property, which included overseas property, and an order that the property freezing order should continue. O unsuccessfully sought permission to appeal the civil recovery order.

In July 2012 the Perry court reversed the previous position in law regarding jurisdiction over foreign property. The Supreme Court held that a civil recovery order could be made only in respect of property within the jurisdiction. Following that decision, O applied to vary the property freezing order to exclude the overseas property. Having regard to Perry, the judge granted permission to appeal. SOCA had in turn been granted permission to appeal that decision in favour of O and now brought that appeal. O also brought two applications to:

  • reopen the refusal of permission to appeal the civil recovery order; and
  • appeal the order of committal made in October 2011.

SOCA's appeal

SOCA argued that a subsequent decision of the Supreme Court construing a statute that affected a decision in an earlier case does not of itself affect the validity of any existing final orders. Therefore, on the facts, the subsequent decision in Perry – finding that Mr Perry's overseas property could not be subject to civil recovery proceedings – was irrelevant to O's case. As authority, SOCA relied on Cadder v HM Advocate General for Scotland,(3) and appealed the judge's decision to grant O permission to appeal, arguing that he was wrong to consider the extension of the property freezing order as separate from the remainder of his order, and that the order was final.

O's appeal

O accepted the procedural bars in support of finality of litigation. However, he argued that if a party to litigation needed assistance from the court, such as to litigate over the powers of a trustee, the law must be applied as it is on the date that the matters are considered. Alternatively, O advanced an argument in relation to the terms of the property freezing order, which specifically provided a liberty to apply and permitted the court to vary or set aside a property freezing order "at any time".

Court of Appeal decision

As observed by Lord Justice Leveson at Paragraph 48, "[a]t the time the order was made, it was entirely justified in law and nobody suggested the contrary". In dismissing O's appeals, the judge observed that there had been no appeal of the property freezing order or the civil recovery order in the months following the relevant orders, and the legitimacy of the orders were challenged only following the subsequent change in the law brought about by Perry. The Court of Appeal dismissed O's argument, noting that to accept it would mean that a litigant wishing to challenge the legality of an order – however long after any right of appeal had been exhausted – could prevent enforcement, even of a final order, until recent developments of the law had been considered. On that basis, a party to litigation would need only to refuse to comply with the order of the court to permit it to litigate or re-litigate the issue of legality. As to the alternative argument advanced by O, the court observed that the variation provisions within the property freezing order were designed to deal with such matters as credible fresh evidence coming to light, noting that the width of wording is coloured and confined by the fundamental principles of the finality of court orders and requirements of legal certainty.

SOCA's appeal was also dismissed. The judge had been correct to grant permission to appeal and allow the matter to be heard.

Comment

The Court of Appeal's decision maintains and protects the finality of litigation, as this would be undermined if changes in common law could be taken into account retrospectively. The Supreme Court's decision in Perry will affect the court's ability to order recovery of property held abroad, but will not be construed to affect final orders made before that decision.

For further information on this topic please contact Natalie Small at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (natalie.small@rpc.co.uk).

Endnotes

(1) [2013] EWHC Civ 518.

(2) Serious Organised Crime Agency v Perry [2012] UKSC 35, [2013] 1 AC 182.

(3) [2010] UKSC 43, [2010] 1 WLR 2601.

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