|December 2, 2013|
Previously published on November 28, 2013
Serious Organised Crime Agency v Amir Azam  EWCA Civ 970
The appellant, Azam, was a defendant in proceedings brought by the Serious Organised Crime Agency (‘SOCA’) under the Proceeds of Crime Act 2002 (‘POCA’). A property freezing order (‘PFO’) was made against Azam (under s.245A POCA) which required him to disclose his assets in a witness statement, verified by a statement of truth. SOCA later discovered that Azam had failed to disclose a bank account containing a significant sum of money. Azam claimed that he thought his wife had disclosed the existence of the account.
Azam appealed against a first instance decision that the PFO should not be varied to allow him to apply some of the assets subject to the order to the payment of future legal expenses. The Judge at first instance considered that Azam had to show that there were no assets available to use for his legal expenses. The Judge refused to make the exclusion sought on the basis that Azam had withheld the existence of the account, and so his statements could not be relied upon and he had failed to show that he had no other assets.
The appeal was allowed. Recovery orders backed up by PFOs engaged the European Convention on Human Rights; there was therefore a need to have regard to the desirability of legal representation. It was not right to transpose principles applying in cases of freezing injunctions in civil proceedings under Part V SOCA 2002. Unlike most of those cases, PFOs could extend to all of the assets of an individual subject to recovery proceedings, leaving nothing to fund legal representation.
It was not for the applicant to positively prove the absence of available assets. If there was no evidence to cast light on the probabilities one way or another, the fact that the applicant had previously concealed assets was not sufficient to show that he was still concealing assets and thereby deprive him of the ability to use his assets for legal representation.
The Court of Appeal held that whilst the Judge at first instance had been entitled to conclude that the applicant’s statement that he had no unfrozen assets could not be relied upon, he had not been entitled to conclude that Azam had other assets which had not been discovered. That was purely speculation. In concluding that there were, or probably were, undiscovered assets available, the Judge had wrongly placed a positive burden of proof on the applicant to prove the absence of other assets. Further, there was nothing to displace the desirability of Azam being legally represented.
The Court of Appeal Judgment confirms that, in cases where the court has doubts about whether there are other assets available to the applicant, but there are no specific grounds for suspicion, the impasse should not be resolved by placing a burden of proof on the applicant to prove the absence of available assets.
The prosecutors will have the burden of presenting some evidence of specific grounds for suspicion that the party subject to the order has assets available to fund legal representation. It should be noted that this was a case involving non-conviction based asset forfeiture, and Mr Azam has not been convicted of any offence in the UK. But it would be fair to say on a more general note, the decision will result in further frustration for law enforcement and prosecutors as they will be concerned that the decision will continue to embolden defendants to hide and lie about their assets and deplete potentially recoverable property in both civil forfeiture and criminal confiscation proceedings.
  EWHC 1480 (QB)