R v Crown Prosecution Service
| Jurisdiction | England & Wales |
| Judge | Lord Justice Simon Brown,Lord Justice Laws,Lady Justice Arden |
| Judgment Date | 20 May 2002 |
| Neutral Citation | [2002] EWCA Civ 670 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 May 2002 |
| Docket Number | Case No: QBACF/2002/0013 QBACF/2002/0573 |
[2002] EWCA Civ 670
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (ADMINISTRATIVE COURT)
(Mr Justice Hooper) QBACF/2002/0013 & QBACF/2002/0025
(Mr Justice Collins) QBACF/2002/0573
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Simon Brown
Lord Justice Laws
and
Lady Justice Arden
Case No: QBACF/2002/0013
QBACF/2002/0025
QBACF/2002/0573
A Mitchell Esq, QC &B Gregory Esq (instructed by HM Customs & Excise) for the Appellant (02/0013)
G Brodie Esq (instructed by Messrs Martyn Prowel) for the First Respondent (02/0013)
A Newman Esq, QC &P Spencer Esq (instructed by Messrs Huttons) for the Second Respondent (02/0013)
A Mitchell Esq, QC &K Talbot Esq (instructed by The Crown Prosecution Service) for the Appellant (02/0025)
N Purnell Esq, QC &Ms Alison Pople (instructed by Messrs Burton Copeland) for the First Respondent (02/0025)
M Chawla Esq, QC (instructed by Messrs Burton Copeland) for the Second Respondent (02/0025)
A Mitchell Esq, QC &Miss Fiona Jackson (instructed by HM Customs & Excise) for the Appellant (02/0573)
The Respondent Anderson did not appear and was not represented (02/0573)
Receivers appointed by the court pursuant to section 37 of the Supreme Court Act 1981 and RSC Order 30 must look for their remuneration and expenses to the assets within their receivership. Such is the clearly established position at common law. What, however, is the position with regard to receivers appointed under Part VI of the Criminal Justice Act 1988 ("the CJA") and the Drug Trafficking Act 1994 ("the DTA"), receivers appointed by the High Court with a view to conserving and realising the assets of a defendant in parallel criminal proceedings who may become subject to a confiscation order? How are these receivers to be remunerated and reimbursed? More particularly, is the defendant liable for these expenses irrespective of whether or not he is convicted and a confiscation order is made against him, or only upon the making of such an order? These fundamentally are the questions raised by these three conjoined appeals.
Two of the cases (which I shall refer to respectively as "Hughes" and as "R & 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 that:
"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."
The third case (" Anderson") was decided ex tempore 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 Andersonhas 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 insofar 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).
In all three cases the prosecution (HM Customs & Excise in Hughes and Anderson, the Crown Prosecution Service in R & 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)).
With that brief introduction let me turn next to summarise the essential statutory scheme insofar 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
Section 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.
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 exceptions as may be specified in the order". "Realisable property" for these purposes is defined by section 74 to mean "any property held by the defendant" (a definition widened by section 102(7): "property is held by any person if he has any interest in it") and "any property held by a person to whom the defendant has directly or indirectly made a [relevant] gift". Section 77(6)(a) provides that a restraint order may be discharged or varied in relation to any property (section 77(7) providing that such an application may be made by any person affected by the order). Section 77(6)(b) provides that a restraint order shall be discharged on the conclusion of the relevant proceedings ("conclusion" being defined by section 102(12) to include the acquittal of a defendant and the satisfaction of any confiscation order made against him). Section 77(8) I must set out verbatim:
"77(8) Where the High Court has made a restraint order, the court may at any time appoint a receiver —
(a) to take possession of any realisable property; and
(b) in accordance with the court's directions, to manage or otherwise deal with any property in respect of which he is appointed,
subject to such exceptions and conditions as may be specified by the court; and may require any person having possession of property in respect of which a receiver is appointed under this section to give possession of it to the receiver."
Sections 78 and 79 deal with charging orders.
Section 80(1) provides that where a confiscation order is made or varied and the proceedings in question have not been concluded and the order or variation is not subject to appeal the High Court may, on an application by the prosecutor, exercise the powers conferred by subsections (2) to (6) of section 80. Those include:
"80(2) The court may appoint a receiver in respect of realisable property."
The following subsections provide that the court may empower a receiver appointed under section 80(2) or under section 77 or in pursuance of a charging order inter alia to enforce any charge and may order any person to give up possession of realisable property to the receiver, and may empower the receiver to realise any realisable property and so forth (subsection (8) providing that a reasonable opportunity shall first have been given for persons holding any interest in the property to make representations to the court). Section 81 has loomed large in the argument and much of it I must now set out:
" Application of proceeds of realisation and other sums
81(1) Subject to subsection (2) below, the following sums in the hands of a receiver appointed under this Part of this Act or in pursuance of a charging order, that is —
(a) the proceeds of the enforcement of any charge imposed under section 78 above;
(b) the proceeds of the realisation, other than by the enforcement of such a charge, or any property under section 77 or 80 above; and
(c) any other sums, being property held by the defendant;
shall first be applied in payment of such expenses incurred by a person acting as an insolvency practitioner as are payable under section 87(2) below and then shall, after such payments (if any) as the High Court may direct have been made out of those sums, be applied on the defendant's behalf towards the satisfaction of the confiscation order.
(2) If, after the amount payable under the confiscation order has been fully paid, any such sums remain in the hands of such a receiver, the receiver shall distribute them —
(a) among such of those who held property which has been realised under this Part of this Act, and
(b) in such proportions,
as the High Court may direct after giving a reasonable opportunity for such persons to make representations to the court.
(3) The receipt of any sum by a justices' clerk on account of an amount payable under a confiscation order shall reduce the amount so...
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