A Chink of Light for Funding from Restrained Funds ? - SOCA v Azam


SOCA V Azam [2013] Lloyd's Rep. F. C. 513

Mr Azam was the defendant in an application to seize property from him pursuant to the civil provisions in the Proceeds of Crime Act 2002. He wanted to vary the Property Freezing Order (PFO) made pursuant to section 245A to allow him to pay his lawyers for his forthcoming trial. Because he had failed to disclose a bank account in his statement of truth, Globe J at first instance refused his application, not being impressed by the contention that the omission occurred only because Mr Azam assumed that his wife had included the account in the list. He ruled that Mr Azam had the burden of proving that he had no other assets with which to pay for his legal expenses and that he had failed to do so.

The Court of Appeal allowed Mr Azam’s appeal. It held that there was no specific burden of proof on an applicant which required him to prove that there were no other available assets which could be used for the relevant purpose, such that if he did not discharge the burden, his application would fail. Following the approach taken in Serious Fraud Office v X [2005] EWCA Civ 1564, it was for the applicant to persuade the court that it would be just to permit the expenditure out of assets affected by the PFO, having regard to all the circumstances (paragraphs 53 and 66). If the court was satisfied that the applicant did have other available assets from which he might meet the costs, then applying paragraph 7A of CPR PD (Civil Recovery Proceedings), the court would not allow the affected assets to be used. If the evidence left the court in doubt, but with specific grounds for suspicion that an applicant had not disclosed all he could and should about his assets, then it might resolve that doubt against the applicant (paragraph 66). If there were no specific indications or grounds for suspicion and nothing that indicated the existence of unexplained or undisclosed available assets, then the fact that an applicant had previously concealed relevant assets was not sufficient by itself to show that he was still concealing such assets, and thereby to deprive him of the ability to use his own assets, despite the constraints of the PFO, to defray the costs of legal representation to defend himself in proceedings. On the evidence there was no positive indication, or any reason to suspect, that X had other available assets somewhere. Globe J. should not have concluded that there were, or even that there probably were, other available assets which had not been discovered. There was nothing to displace the factor identified in s245C(6) of the Proceeds of Crime Act 2002 as to the desirability that a defendant should be represented in proceedings. In the circumstances Mr Azam had shown that it would be just for an exclusion from the PFO to be made as regards the legal costs to be incurred by him in defending the proceedings, so as to enable him to have legal representation for that purpose through to the trial and judgment. 

Though important for Civil POCA cases, this case may not have any great impact in criminal cases. Payment in those cases from restrained funds is governed by sections 46 and 47 of the Crime and Courts Act 2013, which is a very different piece of legislation. In any event at the time of writing those sections are not in force, nor have any draft orders been published. Defence representatives will in any event little care whether fees come from restrained assets or legal aid, not least because the rates will be exactly the same for both.

The judgment in SOCA v Azam can be found here.

To instruct Nigel Power QC in any type of confiscation case, email directly or call 0845 450 0707.