Hughes v Commissioners of Customs and Excise; R v Crown Prosecution Service; Anderson v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 2002 |
| Neutral Citation | [2002] EWCA Civ 734 |
| Date | 2002 |
| Year | 2002 |
| Court | Court of Appeal (Civil Division) |
Crime - Restraint order - Receiver's remuneration - Receiver appointed under statutes concerned with crime - Whether costs of receivership payable from assets under receiver's control not subject to confiscation order -
A receiver appointed under either Part VI of the Criminal Justice Act 1988 or the Drug Trafficking Act 1994 may, until a confiscation order is made in respect of the assets under his control, recover his remuneration and expenses from those assets without being in breach of property rights protected under article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, as scheduled to the Human Rights Act 1998 (post, paras 1, 59, 62, 63).
Where, therefore, in each of three cases where a receiver had been appointed under either the 1988 or the 1994 Act the judge granted an application for a ruling that the receiver was not entitled to recover the receivership costs from assets under the receiver's control but not subject to a confiscation order, and the prosecution in three conjoined appeals sought a reversal of the ruling on the ground that it was wrong in law—
Held, that the appeals would be allowed (post, paras 59, 62, 63).
Per Simon Brown and Arden LJJ. First instance judges who make orders relating to a receiver's remuneration should be alerted to the need under
Per Simon Brown LJ. Given that restraint and receivership orders can bear heavily upon the individuals involved and may leave acquitted defendants with substantially depleted assets, the court should, in deciding whether initially to make, and whether thereafter to vary or discharge, such orders, weigh up the balance of competing interests with the greatest care (post, para 60).
The following cases are referred to in the judgment of Simon Brown LJ:
Andrews, In re[
Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank
Attorney General v Wright[
Boehm v Goodall[
Evans v Clayhope Properties Ltd[
Gardner v London Chatham and Dover Railway Co (No 1)(
Hoffmann-La Roche (F) & Co AG v Secretary of State for Trade and Industry[
Lithgow v United Kingdom(
Mellor v Mellor[
Minelli v Switzerland(
P (Restraint Order: Sale of Assets), In re[
Raimondo v Italy(
Sekanina v Austria(
Sporrong and Lönnroth v Sweden(
W (Drug Trafficking) (Restraint Order: Costs), In reThe Times, 13 October 1994
Wilson v First County Trust Ltd (No 2)
No additional cases were cited in argument.
By an order of 3 May 2000 Sullivan J granted an application by the Customs and Excise Commissioners for restraint and receivership orders against the respondents, Nicholas David Lewys Hughes, Timothy Hughes and C. By permission of Hooper J the commissioners appealed from his order of 21 December 2001 deleting paragraphs of the restraint and receivership orders allowing payment of the receiver's costs out of assets not subject to a confiscation order.
The facts are stated in the judgment of Simon Brown LJ.
Andrew Mitchell QC and Barry Gregory for the commissioners.
Graham Brodie for the first respondent.
Alan Newman QC and Paul Spencer for the second and third respondents.
By an order of 3 March 2000 Moses J granted an application by the Crown Prosecution Service for restraint and receivership orders against the respondents, R and W. By permission of Hooper J the Crown Prosecution Service appealed against his order of 21 December 2000 to the same effect as his order in the Hughes case.
The facts are stated in the judgment of Simon Brown LJ.
Andrew Mitchell QC and Kennedy Talbot for the Crown Prosecution Service.
Nicholas Purnell QC and Alison Pople for the first respondent.
Mukul Chawla QC for the second respondent.
By an order of 21 June 2000 Forbes J granted an application by the commissioners for a restraint order against the respondent, Gilbert Fitzroy Anderson. Pending confiscation proceedings against the respondent, Maurice Kay J made by consent a management receivership order against him. By permission of Collins J the commissioners appealed against his order of 18 February 2002 preventing the receiver from recovering his costs from assets under his control except those specified in the order.
The facts are stated in the judgment of Simon Brown LJ.
Andrew Mitchell QC and Fiona Jackson for the commissioners.
The respondent did not appear and was not represented.
20 May. The following judgments were handed down.
SIMON BROWN LJ
1 Receivers appointed by the court pursuant to section 37 of the
2 Two of the cases (Hughes and R and another) were decided together by Hooper J at first instance. His conclusion, set out in a lengthy and thoughtful reserved judgment dated 21 December 2001, was:
“98. The receiver may not use an unconvicted defendant's assets to meet the costs of the receivership. Subject to an exception where there has been unreasonable behaviour on the part of the defendant (paragraph 59 above), costs of a receivership may only be met out of a convicted defendant's assets and out of the amount ordered to be paid by the defendant under any confiscation order subsequently made against him. It follows that an acquitted defendant or a third party affected by a receivership order is not required to bear the receiver's costs out of those of his assets of which the receiver has taken possession … the costs of a receivership may only be recovered from the assets of a defendant in the circumstances set out in section 81(5) [of the CJA], namely out of any amount paid by the receiver to the justices' clerk in satisfaction of a confiscation order.”
3 The third case (Anderson) was decided extempore by Collins J on 18 February 2002, when a somewhat different conclusion was arrived at. Collins J, whilst stating that he “would certainly follow Hooper J if [he] was dealing with an unconvicted defendant or in relation to third parties whose rights had not yet been determined”, pointed out that Anderson had been convicted, and held that although no confiscation order had yet been made against him, the receiver could recover his costs and remuneration but only in so far as they arose from managing, and only out of, certain specified assets which the defendant acknowledges to be his (and not other assets which the defendant contends are owned by third parties, albeit no third party has yet so contended).
4 In all three cases the prosecution (Customs and Excise in Hughes and Anderson, the Crown Prosecution Service in R and another) appeal with the permission of the judge below. It is the prosecution's case that the receiver's remuneration and expenses should come in the first place from the estate under his control and then, if a confiscation order is made, from any sums realised and remitted to the justices' clerk under section 81(5); only if no funds are available from those sources should they come from the prosecutor under section 88(2) of the CJA (the prosecutor then having the possibility in certain cases of reimbursement under section 81(6)).
5 With that brief introduction let me turn next to summarise the essential statutory scheme, in so far as it relates to receivers, which I shall do exclusively by reference to the provisions of the CJA, those of the DTA being in all material respects identical.
The legislative framework
6Section 76 of the CJA provides that the High Court's powers under sections 77 and 78 are exercisable where proceedings have been instituted against any person for a relevant offence, or the court is satisfied that a person is to be charged with such an offence, and in either case the court is also satisfied that a confiscation order may result.
7 Section 77 deals with restraint orders and provides that the High Court may by such an order “prohibit any person from dealing with any realisable property, subject to such conditions and...
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