EWCA Civ J1019-3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Schiemann)
Before: The Master of the Rolls (Sir Thomas Bingham) Lord Justice Leggatt and Lord Justice Roch
MR. A. MITCHELL (instructed by Messrs. Lawrence Graham, London WC2) appeared on behalf of the Appellant.
MR. T. SEWELL (instructed by Messrs. Sears Blok, London SE5) appeared on behalf of the Respondent.
Royal Courts of Justice,
London, WC2A 2LL.
(Computer Aided Transcription by John Larking., Chancery House, Chancery Lane, London WC2. Telephone No. 071 404 7464. Official Shorthand Writers to the Court.)
Tuesday, 19th October, 1993.
THE MASTER OF THE ROLLSThe issue in this appeal can be shortly stated: can the procedure introduced by section 16 of the Criminal Justice (International Co-operation) Act 1990 be invoked when the confiscation order in question was made before the section came into force?
Mr. Barretto was arrested for very serious drug offences in March 1989. He was in due course charged with conspiracy to supply cocaine. On 17th May 1989 a restraint order, having an effect similar to a Mareva injunction, was made against him under section 8 of the Drug Trafficking Offences Act 1986.
On 26th January 1990 Mr. Barretto, who had pleaded guilty to the charge of conspiracy, appeared before His Honour Judge Owen Stable Q.C., in the Crown Court at Snaresbrook, and the procedure prescribed by the 1986 Act was carefully followed. The officer in charge of the case submitted a statement in writing under section 3 of the Act. In this he listed
Mr. Barretto's assets (including his house at cost and not market value) and valued them at £296,853.29. He estimated
Mr. Barretto's proceeds from drug dealing at £646,144.91. In the statement the officer referred to 14 International Money Orders bought by a co-defendant with money supplied by
Mr. Barretto. Each of these had a value of U.S $7,500 and the purchase price was said to have come from the sale of cocaine. The statement said they had not been recovered and Mr. Barretto was not able to explain where they went.
Judge Stable had first to determine, under sections 1(2) and 2 of the 1986 Act, whether Mr. Barretto had benefited from drug trafficking and if so to what extent. Having heard argument he held that Mr. Barretto had benefited from drug trafficking and accepted the figure put forward on behalf of the Crown, but deducted a sum spent on acquiring
Mrs. Barretto's half share in the matrimonial home, and so reached a total of £595,519.91. He then had, under sections 1(4) and 4 of the Act, to assess the amount to be recovered in Mr. Barretto's case. This he did, assessing the amount to be recovered in the sum of £287,603.29. The Court then made a confiscation order in that sum, with three years' imprisonment in default of payment, to be served consecutively to any term to be imposed for the substantive offence. Applying section 4(2) of the 1986 Act, the Court then certified:
(1) that the defendant had benefited from drug trafficking in the sum of £595,519.91;
(2) its satisfaction that the amount that might be realised at the time of making the confiscation order was £287,603.29.
In the certificate, a number of items were listed as relevant to the Court's determination of the amount that might be realised at the time of making the confiscation order. One of those items was a sum of cash then in the hands of the police. The remaining items included property (the house and a car) and balances held in various bank accounts but did not include any International Money Orders. The Court was satisfied under section 4(3) that the amount which might be realised at the time the confiscation order was made was less than the amount assessed to be the value of Mr. Barretto's drug trafficking, and so the amount to be recovered in his case under the confiscation order was the amount appearing to the Court to be the amount that might be so realised.
These procedures took place, as sub-sections (1) and (4) of section 1 of the 1986 Act required, before Mr. Barretto was sentenced. For the offence of conspiracy he was sentenced to 20 years' imprisonment, a discount of one third (from 30 years) being made to reflect his plea of guilty. In November 1990 an appeal against the length of the sentence and the amount of the confiscation order was dismissed.
I pause at this point to make three observations on the 1986 Act:
(1) The confiscation procedure introduced by the Act is clearly expressed to operate where payment has been received from drug trafficking whether before or after the commencement of section 1 of the Act. (See sections 1(3) and 2). To that extent the 1986 Act had retroactive effect.
(2) The Act made provision for reduction of the amount to be recovered under a confiscation order if (a) the defendant satisfied the High Court that his realisable property was inadequate for payment of the balance of the confiscation order, and (b) the High Court so certified, giving reasons, and (c) the Crown Court thought it just in all the circumstances to substitute a lesser amount for the amount to be recovered under the order. On such reduction, the Crown Court would shorten, as might be appropriate, the period of imprisonment to be served in default of payment.
(3) The Act gave the Crown, or a Receiver appointed under section 8 or section 11, power to recover from a defendant the sum shown as recoverable in the confiscation order. It did not divest a defendant of any rights he might have in any assets and the total treated as realisable might consist wholly or in part of assets which were not the product of drug trafficking so long as the total did not exceed the amount assessed to be the value of the defendant's proceeds of drug trafficking.
It is thus plain that on a defendant's application the amount to be recovered under a confiscation order could in certain circumstances be reduced, but there was no provision for the Crown or a Receiver to apply for that sum to be increased. On the making of a confiscation order a defendant would accordingly know the limit of his financial obligation which would then be fixed, subject to any appeal or application by him. He would also know that if he paid the recoverable sum as certified he would not have to serve the period of imprisonment in default, and if he paid that sum out of assets which were not the proceeds of drug trafficking he would not (vis-a-vis the Crown or a Receiver) lose his title to assets which were.
Early in 1991, after the confiscation order, the police learned of the existence of 25 International Money Orders. These included some of those of which the police had known earlier. Mr. Barretto confirmed, it is said, that each of the orders had either been purchased by him or by a third party on his instructions. He confirmed that the monies for the purchase of the orders had been obtained from the sale of drugs. They were still under his control, and a sum of £104,624.93 was realised upon their sale and used to pay off the confiscation order.
It does not appear that any date was fixed for payment when the Crown Court made the confiscation order. On 30th January 1992, however, application was made to Pill J for appointment of a Receiver on grounds that the recoverable sum had not been fully paid. The judge ordered that unless
Mr. Barretto satisfied the confiscation order in full by 28th February 1992 a Receiver should be appointed for the purpose of enforcing the order. Payment in full was not made by 28th February and the order took effect.
When the Receiver was appointed a principal sum of £16,620.09 remained unpaid. This sum was paid within a week. The Receiver's only claim now is for an outstanding sum said to be due by way of interest.
The Criminal Justice (International Co-operation) Act 1990 was enacted to give effect in English Law to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances ("the Vienna Convention")...
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