Crown Prosecution Service v Richards and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Thorpe |
| Judgment Date | 27 June 2006 |
| Neutral Citation | [2006] EWCA Civ 849 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B4/2005/2585 & B4/2005/2605 |
| Date | 27 June 2006 |
[2006] EWCA Civ 849
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE LIVERPOOL DISTRICT REGISTRY FAMILY DIVISION
THE HON MR JUSTICE BENNETT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Thorpe
Lord Justice Moses and
Mr Justice Hedley
Case No: B4/2005/2585 & B4/2005/2605
LV03D01632
Mr K Talbot (instructed by Crown Prosecution Service) for the Appellant
Mr M Sharpe (instructed by Morecrofts Solicitors) for the 1 st Respondent
Mr G Lazarus (instructed by Canter Levin & Berg) for the 2 nd Respondent
This is the judgment of the court, largely drafted by Hedley J., on an application, by the CPS, to appeal against orders made on 3 rd November 2005 by Bennett J sitting at Liverpool concurrently in the Administrative Court and the Family Division. We granted permission to appeal at the outset of the hearing.
The question raised in this appeal is short but important: how does the court resolve the conflict between a public policy imperative to deprive offenders of the fruits of their crime and the requirement that dependants are provided for after divorce when the only funds available for both are the same?
In this case there were two sets of concurrent proceedings. In the Administrative Court, Bennett J. was dealing with an application for a restraint order in proceedings under the Drug Trafficking Act 1994 which covered the whole of the assets of a convicted drug dealer, Anthony Richards. In the Family Division he was considering the claims of the wife, Lindsay Jane Richards for ancillary relief under the Matrimonial Causes Act 1973 for herself and the child of the family Ben, who was born on 26 th February 2001.
For the purposes of this appeal the salient background can be stated quite shortly. The parties' relationship began in 1994 when both were in their very early twenties. Mr Richards became embroiled in dealing in heroin and in particular in its importation from Holland. He was arrested in Holland in connection with a consignment of 169 kilos of heroin (worth about £8.8m in the UK market), was convicted in Holland in the summer of 2004 and was sentenced to 10 years imprisonment which he is currently serving. There are outstanding confiscation proceedings against him in Holland, which it is thought should be determined later this year.
The wife had begun divorce proceedings in October, 2003, which were undefended and concluded in the making Absolute of the Decree of Divorce on 9 th June 2004. The way was, thus, clear for her to seek final orders by way of ancillary relief.
Although the husband's assets were all in this country, they were susceptible to Dutch confiscation proceedings by virtue of the Drug Trafficking Act 1994, (Designated Countries & Territories Order 1996) (S.1. 96/2880)). The learned judge correctly stated the effect of that order in his approval of the following passage from the skeleton argument of counsel for the CPS: –
"The Netherlands is a designated country. The CPS acts on behalf of the government and the husband was prosecuted in Holland. The Dutch court will shortly consider making a confiscation order against him, the effect of which is to require him to pay a sum of money in order to deprive him of the proceeds of drug trafficking…
Such an order (which under DCTO calls 'an external confiscation order') if made, may be enforced in England by registration pursuant to section 40 of the Drug Trafficking Act 1994, and then by appointment of a receiver pursuant to section 29 of Schedule 3 of the Statutory Instrument.
The powers of the Administrative Court to make restraint and receivership orders where there is, or may be, an external confiscation order in a designated country are the same as its powers where the confiscation order that has been, or may be, made is a domestic confiscation order made on conviction for a drug trafficking offence in the Crown Court."
The Administrative Court had, indeed, made a restraint order on 3 rd November 2003 which, subject to a consensual variation on 22 nd March 2004, remained in force at the date of the order now under appeal. The order covered all the then known assets of Mr. Richards, including three properties (one of which was the former matrimonial home) and two bank accounts. The estimated maximum confiscation order which it is anticipated will be made by the Dutch courts is €871.836 (£534,000), a sum which exceeds the value of the restrained assets.
The present position of the wife is that she lives at 43 Inglewood Road, Rainford, the former matrimonial home, with Ben. She would like to remain in the Rainford area near her parents who have undoubtedly been very supportive. Her case, as put to Bennett J, was that she would need £150,000 to re-house herself and Ben in the Rainford area and that she would accept that in full and final satisfaction of her ancillary relief claims.
In his full and considered judgment Bennett J made a number of crucial findings of fact which are not susceptible to challenge. First, he concluded that the net value of the four properties of which he found the husband to be the beneficial owner was £431,000. Secondly, he found that the wife (by reason of a gift from her parents) had a 13.3% beneficial interest in the former matrimonial home which he quantified at £35,750. Thirdly, he found that all the family assets (other than the gift) were the proceeds of drug trafficking. Fourthly, he found it 'highly likely' that the husband had other undisclosed assets; and finally he found that "the wife knew that the husband was involved in criminal activities and that she really knew that from the word go." It follows that the family assets comprise tainted money which the wife must have known was tainted.
It also follows that the whole of the family assets (save for £35,750) are susceptible to confiscation by the Dutch court and that that is enforceable in this country. Furthermore, it follows that these are the only assets to which the wife and Ben can look for their future housing and support. Hence the issue which the learned judge was required to determine.
The Judge ordered a sale of all the properties, declared she was entitled to £37,750, ordered a lump sum of £39,250 out of the net proceeds of sale and then subjected the remaining assets to a restraint order so as to satisfy any confiscation order made by the Dutch Court. The precise issue in the appeal is whether he was plainly wrong (or wrong in law) to order the lump sum of £39,250; the answer depends on the resolution of the issue identified at the outset of this judgment.
Bennett J sets out his essential reasoning in paragraph 73 of his judgment identifying fifteen considerations that he had taken into account. He had also considered the judgments of this court in Re MCA, known in full as: Customs & Excise Commissioners v A & Another, A v A [2003] Fam 55. Essentially he conducted a classic discretionary balance. He took into account the cardinal factors of the tainted money and the wife's guilty knowledge, which he reflected in a significant discount on the lump sum actually awarded, whilst still giving effect to Section 25(1) of the 1973 Act which required him to make Ben's welfare his first consideration.
Mr Talbot, on behalf of the CPS (supported by Mr Lazarus on behalf of the husband) challenges the judge's decision to engage in any discretionary balancing exercise at all. Despite an elaborate skeleton argument, the essence of his submissions was straightforward. He contended that public policy required that drugs dealers were deprived of the fruits of crime and that those fruits should not be distributed to others, least of all those with guilty knowledge of the origin of those assets.
He developed that submission by demonstrating that that was the clear policy of the Drug Trafficking Act 1994 (and continued by its successor the Proceeds of Crime Act 2002). The Act was in furtherance of international obligations assumed by...
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