The High Court has refused to lift a Criminal Assets Bureau freezing order imposed on assets linked to D.C. and two companies during an investigation connected with an alleged cross-border VAT carousel fraud.
The original order was obtained without notice on November 19, 2002 under section 2 of the Proceeds of Crime Act 1996. It froze money in several bank accounts. Further accounts were added the following day and other assets were subjected to similar restrictions in February 2003.
The defendants later asked the court to discharge the order. They argued that CAB had failed to disclose important information when seeking the original ex parte order, including details of parallel investigations in Ireland and the United Kingdom, the seizure and transfer of business documents and D.C.'s arrest in Britain.
Mr Justice Clarke held that CAB, like a private party seeking an onerous order without notice, was under a duty to disclose material matters to the court. That obligation arose because the defendants had no opportunity to be heard before their assets were frozen.
Most of the alleged omissions were not material, the judge found. At the time of the 2002 application, High Court authority treated the Proceeds of Crime Act as extending to the proceeds of crimes committed abroad. The later Supreme Court ruling that the legislation did not then cover foreign crime could not retrospectively change the significance of information available in 2002.
The court did find one material omission. D.C.'s arrest and the removal of substantial business documentation to the United Kingdom could have affected the assessment of whether an immediate ex parte order was necessary by reducing the practical ability to move assets.
However, the judge described that relevance as marginal. The arrest was disclosed immediately after the order was made, there was no basis to find deliberate concealment and evidence had already been given of an attempted transfer of a very substantial sum from the accounts.
The court therefore exercised its discretion to leave the freezing order in place and refused the defendants' application to discharge it.