Re Norris
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE TUCKEY,LORD JUSTICE SCHIEMANN,LORD JUSTICE STUART SMITH |
| Judgment Date | 27 January 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0127-6 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 January 2000 |
| Docket Number | Case No: QBC 1999/0400/4 |
[2000] EWCA Civ J0127-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (From the Order of Mr Justice Latham)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Stuart Smith
Lord Justice Schiemann and
Lord Justice Tuckey
Case No: QBC 1999/0400/4
Mr A Nicol QC & Mr S Cheetham (instructed by Saunders & Co solicitors for the Appellant)
Mr A Mitchell QC & Mr K Talbot (instructed by HM Customs and Excise solicitors)
Friday 28 January, 2000
Introduction
Clifford Norris ("the Defendant") was convicted at the Lewes Crown Court of conspiring to import cannabis and related firearms offences and sentenced to 9 1/2 years imprisonment. On the 24 June 1996 after conviction but before sentence the trial judge, Judge Brown, made a confiscation order against the Defendant in the sum of £386,397 under the provisions of the Drug Trafficking Offences Act 1986. At the hearing before this Order was made the appellant, who is the Defendant's wife, gave evidence that the matrimonial home ("the house"), which is in her name and in which she still lives, was her property and did not therefore form part of the Defendant's realisable property for the purposes of the 1986 Act. The Judge held that the house was beneficially owned by the Defendant and its realisable value, £300,000, therefore went to make up the Order which he made.
Nothing was paid under the confiscation order and so on the 4 February 1999 Latham J made an order in the High Court appointing a receiver to realise the Defendant's property. However, he left open the opportunity for the Appellant to apply to vary this order which she did with the benefit of legal representation on the 31 March 1999. Based on an affidavit from the Appellant containing substantially the same evidence as she had given in the Crown Court, Counsel on her behalf argued that she had an interest in the house and that this should be reflected in the court's order, including the powers which it gave to the receiver. Latham J decided that the Appellant could not re-open the issue of ownership of the house which had already been decided by the Crown Court. The Appellant appeals against this decision with the Judge's permission. The appeal raises a question of some importance since the matrimonial home is often the only substantial visible and realisable asset of a defendant convicted of a criminal offence for which a confiscation order may be made.
History
The 1986 Act, which applies to this case but which has now been replaced by the Drug Trafficking Offences Act 1994, sets out the steps which a court has to follow before making a confiscation order. Sections 1 to 4 require the court first to decide whether the defendant has benefited from drug trafficking and if so by how much. In this case the Defendant admitted that he had benefited to the tune of £1.3 million. The court has then to determine the value of the defendant's realisable property. This is defined by Section 5 as any property held by the Defendant or any gift caught by the Act. Where the value of the realisable property is less than the benefit, the confiscation order has to be made for this lesser amount.
The provisions of Section 5 (3) (4) and (5) make it clear that it is only the defendant's interest in any realisable property which has to be valued and taken into account. In other words the Act recognises any third party interest in the property under consideration and is only intended to confiscate the value of the defendant's interest in it.
At the confiscation hearing before Judge Brown the only issue was whether the house formed part of the Defendant's realisable property. It was the Defendant's case and the Appellant's evidence that it did not. He had given evidence at the trial but did not do so at this hearing. She was not represented at the hearing but was called by leading counsel for the Defendant and gave evidence and was cross-examined. Her evidence was substantially the same as that contained in her affidavit. Put shortly she said that she contributed to the purchase price of earlier matrimonial homes, the proceeds of which were used to buy the house where she now lives. Her evidence about this was quite detailed and was supported by documents which showed the sale and purchase prices of the various houses. Apart from one or two obvious inconsistencies I am quite unpersuaded that there is anything new of any importance in the affidavit as compared with the evidence which the Appellant gave in the Crown Court. At the end of this evidence leading counsel made submissions to the effect that the house belonged legally and beneficially to the Appellant or at least that she had a substantial interest in it. Judge Brown disbelieved the Appellant's evidence and rejected these submissions. He decided that all the money which had been used to buy the various houses had come from the Defendant and therefore the Appellant had no beneficial interest in the house. He proceeded to make the confiscation order against which the Defendant did not appeal.
Before the Defendant's trial the customs had obtained a restraint order from the High Court over the Defendant's property, including the house, under Section 8 of the Act. When the confiscation order was not met the Defendant was at risk of having to serve the 4 years imprisonment which the Judge imposed in default of payment and the customs invoked the provisions of Section 11 of the Act to enforce the order. Section 11 says:
Realisation of property
11. (1) Where -
(a) in proceedings instituted for a drug trafficking offence, a confiscation order is made,
(b) the order is not subject to appeal, and
(c) the proceedings have not been concluded.
the High Court may, on an application by the prosecutor, exercise the
powers conferred by subsections (2) to (6) below.
(2) The court may appoint a receiver in respect of realisable property.
(3) The court may empower a receiver appointed under subsection (2) above, under section 8 of this Act or in pursuance of a charging order —
(a) to enforce any charge imposed under section 9 of this Act on realisable property or on interest or dividends payable in respect of such property, and
(b) in relation to any realisable property other than property for the time being subject to a charge under section 9 of this Act, to take possession of the property subject to such conditions or exceptions as may be specified by the court.
(4) The court may order any person having possession of realisable property to give possession of it to any such receiver.
(5) The court may empower any such receiver to realise any realisable property in such manner as the court may direct.
(6) The court may order any person holding an interest in realisable property to make such payment to the receiver in respect of any beneficial interest held by the defendant or, as the case may be, the recipient of a gift caught by this Act as the court may direct and the court may, on the payment being made, by order transfer, grant or extinguish any interest in the property.
……….
(8) The court shall not in respect of any property exercise the powers conferred by subsection (3)(a), ( 5) or (6) above unless a reasonable opportunity has been given for persons holding any interest in the property to make representations to the court."
Section 13 (4) of the Act says that the powers contained in Section 11 shall be exercised with a view to allowing any person other than the defendant to retain or recover the value of any property held by him. Again this is a clear recognition in the Act of third party interests.
Applications to the High Court under this legislation are governed by Order 115. Rule 4 (3) required the restraint order to be served on the appellant and Rule 7(2) required the appellant to be given notice of the application under section 11. Rule 7 (4) (c) enables the court to make declarations in respect of the property interests which a receiver is empowered to realise. In this case, as well as the order appointing the receiver, Latham J made a declaration in accordance with the Crown Court's decision that the Defendant beneficially owned the house. In deciding that he could not re-open this issue the Judge followed the decision of Mr Justice Buxton (as he then was) in Re. K. ( unreported : 3/7/1995).
Re. K. was a fraud case, but the...
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