Louis Glatt (Defendant) and the Criminal Justice Act 1988 and Others (Applicants) Louis Glatt and Another (Respondents) Leslie Glatt and Rita Glatt (the Executors of the Estate of the Late Chaja Glatt) and Others (Interveners)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Munby |
| Judgment Date | 25 November 2002 |
| Neutral Citation | [2002] EWHC 2495 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CJA/32/1997 |
| Date | 25 November 2002 |
[2002] EWHC 2495 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
The Honourable Mr Justice Munby
Case No: CJA/32/1997
Mr Martin Evans and Ms Abigail Barber (instructed by Denton Wilde Sapte) for the applicants (the joint receivers)
Mr Louis Glatt (the defendant and first respondent) appeared in person
Mr Lionel Swift QC and Mr Michael Gadd (instructed by Kanter Jules) for the first, second and third interveners
Ms Bridget Williamson (instructed by Collyer-Bristow) held a watching brief for the fifth intervener
The second respondent and the fourth, sixth, seventh, eighth and ninth respondents were neither present nor represented
These are confiscation proceedings under the Criminal Justice Act 1988 arising out of the conviction at Southwark Crown Court (His Honour Judge Elwen and a jury) on 12 February 2001 of the defendant Louis Glatt of a single offence of conspiracy to launder the proceeds of crime. The particulars of the offence as set out in the indictment were that the defendant had conspired between 1 October 1994 and 31 January 1997 with a number of individuals including a man called Ellis Anthony Martin ("Mr Martin"). The defendant was a solicitor and Mr Martin was one of his clients. In the course of his ruling on confiscation on 29 May 2002 Judge Elwen said:
"My sentence was based on a view, as to which I had no doubts whatsoever, that the evidence pointed overwhelmingly to the defendant's having been involved from 1 October 1994."
It follows, as all counsel before me are agreed, that the defendant's offence is to be treated for the purposes of the 1988 Act as having been committed on 1 October 1994: see R v Brown and others [2001] EWCA Crim 2761, paras [47]-[48].
It also follows that the confiscation proceedings, both before the Crown Court and in this court, are regulated by the Criminal Justice Act 1988 as amended by the Criminal Justice Act 1993 (but not as subsequently further amended by the Powers of the Criminal Courts Act 1995).
On 23 July 2001 the defendant was sentenced to a term of seven years' imprisonment.
On 12 March 2002 Judge Elwen ruled that the defendant had benefited from his criminal conduct within the meaning of section 71 of the 1988 Act notwithstanding that, as he said:
"It was accepted by the prosecution … that Mr Glatt had not benefited personally in the sense of having made any money from his participation in the conspiracy, apart from the receipt of an old Rover motorcar and agreement for the payment of his fees … the case was summed up to the jury on that basis."
On 16 May 2002 Judge Elwen assessed the amount of that benefit in the sum of £3,787,330. On 29 May 2002 Judge Elwen found that the defendant had realisable assets to the value of £3,993,142 and accordingly made a confiscation order in the sum of £3,787,330.
Before I proceed any further I must first summarise the relevant statutory provisions. The general scheme of the legislation is well-known and I need not describe it. Section 71 empowers the Crown Court to make confiscation orders. Section 80 confers on the High Court both power to realise a defendant's property and, as the Court of Appeal has recently emphasised in HM Customs & Excise v A [2002] EWCA Civ 1039, [2002] 3 FCR 481, paras [21], [43], [94] and [95], a discretion as to whether or not to exercise that power.
Central to the legislative scheme is the concept of "realisable property". The value of a defendant's realisable property determines the amount of the confiscation order made by the Crown Court: see sections 71(6) and 74(3). And the High Court's powers under section 80 are exercisable only in relation to the defendant's realisable property: see sections 80(2)-(6).
"Realisable property" is defined by section 74(1) as meaning, subject to certain exceptions in section 74(2), none of which is relevant for present purposes,
"any property held by the defendant … and … any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act."
"Property" is defined in section 102(1) as including:
"money and all other property, real or personal, heritable or moveable, including things in action and other intangible or incorporeal property."
Section 102(7) provides that:
"Property is held by any person if he holds an interest in it."
Section 102(1) provides that:
""interest", in relation to property, includes right."
I note, though nothing turns on the point in the present case, that the effect of section 74(12) is to include within the category of gifts transactions at a significant under value.
Section 74(10) provides that:
"A gift … is caught by this Part of this Act if –
(a) it was made by the defendant at any time after the commission of the offence or, if more than one, the earliest of the offences to which the proceedings for the time being relate; and
(b) the court considers it appropriate in all the circumstances to take the gift into account."
It is in my judgment quite clear from the language of sections 74(1) and 74(10) that a gift as such is not within the scope of the Act. The Act applies only to those gifts which are "caught by this Part of this Act" and that expression is a term of art (see section 102(2)) which is defined in section 74(10). It is equally clear in my judgment from the plain words of section 74(10) that a gift is "caught by this Part of this Act" if—and only if—both limbs of section 74(10) are satisfied. It follows necessarily that no gift can be "caught" by the Act unless "the court" considers it "appropriate in all the circumstances to take the gift into account." In other words, a gift is "caught" only if the court decides in the exercise of judicial discretion that it should be. It is common ground before me that the Act nowhere defines what is meant for this purpose by "the court".
The defendant's offence, as I have said, was committed on 1 October 1994. His mother, Chaja Glatt, died on 21 November 1994. By her last will dated 2 January 1991 she left her residuary estate as to one quarter each to the defendant, to the defendant's brother Leslie Glatt, to the defendant's sister Helen Glatt (Helen Gregory), and to the two children of the defendant's brother Jack Glatt. They, I am told, are aged 15 and 14.
On 8 October 1996 (that is, very shortly before the second anniversary of her death), the defendant, Leslie Glatt and Helen Glatt together executed a deed of variation varying the dispositions of the will for the benefit of a charity, The Alba Charitable Trust ("Alba"). Clause 2 of the deed provided that the testatrix should be deemed to have left their three one-quarter shares in the residuary estate upon trust for Alba. Clause 4 provided that the parties to the deed elected that the provisions of section 142(1) of the Inheritance Tax Act 1984 and section 62(6) of the Chargeable Gains Act 1994 should apply.
On 16 March 2000 probate was granted to the executors named in the will, the defendant and Leslie Glatt. On 26 April 2002 an order was made in the Chancery Division appointing Rita Glatt as personal representative of the estate in the place of the defendant. The estate remains largely unadministered.
The effect of the deed of variation was to divest the defendant of his share in the residuary estate, though of course it left the children's one-quarter share unaffected. Quite plainly, and even allowing for the rule in Commissioner of Stamp Duties (Queensland) v Livingstone [1965] AC 694 and Marshall v Kerr [1995] 1 AC 148, the defendant's one-quarter share in the residuary estate was "property" within the meaning of section 102(1): see, if authority be required, R v Walbrook and Glasgow (1994) 15 Cr App R (S) 783 at 785, 788.
So far as concerns the defendant's share of the residuary estate the deed of variation was a "gift" for the purposes of sections 74(1) and 74(10). Bearing in mind that the defendant's offence was committed on 1 October 1994 and that the deed of variation was executed on 8 October 1996, the requirements of section 74(10)(a) are satisfied. It follows that whether the deed of variation constitutes, in respect of the defendant's share, a gift "caught" by the Act, as the Crown contends, turns on the application of section 74(10)(b).
At the hearing on 29 May 2002 Judge Elwen had before him three witness statements from Kenneth Ford, a senior investigation officer of Her Majesty's Customs & Excise national investigation service. In his statements Mr Ford referred to the deed of variation. In his second statement he said:
"The prosecution contend that the gift provision of the Act applies in relation to the quarter share … bequeathed to this defendant under the original provisions of his mothers will."
Mr Ford gave oral evidence and was cross-examined on behalf of the defendant. In the course of his ruling on 29 May 2002 Judge Elwen said this:
"Re-examined by the prosecution, Mr Ford said that...
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