Re Norris

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLORD HOPE OF CRAIGHEAD,LORD BROWNE-WILKINSON,LORD CLYDE,LORD HUTTON,LORD HOBHOUSE OF WOODBOROUGH
Judgment Date28 June 2001
Neutral Citation[2001] UKHL 34
Date28 June 2001

[2001] UKHL 34

HOUSE OF LORDS

Lord Hope of Craighead

Lord Browne-Wilkinson

Lord Clyde

Lord Hutton

Lord Hobhouse of Wood-borough

In the Matter of Clifford Norris
(Respondent)
and
and
In the Matter of an Application by Teresa Wendy Norris
LORD HOPE OF CRAIGHEAD

My Lords,

1

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hobhouse of Woodborough. I agree with it, and for the reasons he gives I would allow the appeal.

2

The Court of Appeal held that Mrs Norris had a fair opportunity to put her case in the Crown Court where she and her husband were making common cause and she gave evidence. It was on that basis that Tuckey LJ said that it would be an abuse of process for her to relitigate the same issues in the High Court: [2000] 1 WLR 1094, 1101E-F. But, as my noble and learned friend has explained, the proceedings in the Crown Court and those in the High Court are designed to serve different purposes and the interests of Mrs Norris and her husband in the matrimonial home are not the same. Mrs Norris was not a party to the proceedings in the Crown Court, nor did the procedure which the statute lays down require her case that she had a beneficial interest in the property to be put at that stage.

3

At the stage when the proceedings were in the Crown Court the only question which had to be resolved was the value of the husband's interest in the house. The question for that court was the amount of the defendant's realisable property, as this was the upper limit on the amount of money which he could be ordered to pay under section 1(5) of the Drug Trafficking Offences Act 1986 by that court. It was not the function of the Crown Court to make any order which affected the interests that any third parties might have in the property whose value it took into account when determining the amount of the defendant's realisable property.

4

The scheme of the Act, so far as third party interests are concerned, is for their claims to be resolved in the High Court. The question for the High Court, when the proceedings reach this stage, relates not to the amount of money which the defendant must pay - that has already been fixed by the order made in the Crown Court - but to the powers which the receiver is to be authorised to exercise. It is at this stage that third parties are entitled to have their claims heard and determined. This is when, as a matter of both substance and procedure, representations may be made as to their interests, if any, in the property which the receiver wishes to realise. This is provided for expressly by section 11(8) of the Act, consistently with which RSC, Ord 115, r 7(4) lays down the procedure by which those holding any interest in the realisable property are to be notified.

5

Provisions designed to protect the interests of third parties are conspicuously absent from the rules of procedure that apply at the stage of the hearing in the Crown Court. Third parties are not entitled to participate in the criminal proceedings in that court. But the issue for the Crown Court is not whether any property in which a third party might have an interest is to be confiscated. The order which it makes is an order which is directed against the defendant only, and it is simply an order for the payment of a sum of money. The question of realisation, if the exercise of powers by a receiver is needed in order to make good the order which the defendant is required to satisfy, is reserved for the High Court.

6

I do not therefore, with respect, agree with the observation by Tuckey LJ that the situation which has arisen in this case is exactly that which the doctrine of abuse of process is designed to prevent: [2000] 1 WLR 1094, 1101F. The scheme of the Act itself shows that this proposition must be unsound. It cannot be an abuse of process for a third party holding an interest in property, to whom a right is given by section 11(8) of the Act to make representations to the High Court, to seek to exercise that right just because he or she gave evidence in the Crown Court in support of the defendant's case that the property was not to be valued and taken into account as realisable property. I agree with my noble and learned friend, Lord Hobhouse that there may be other cases where the position which a third party wishes to adopt may be regarded as an abuse of process which should not be allowed to stand in the way of the enforcement of a confiscation order. But, for all the reasons which he has given, that has not been shown to be the position in this case.

LORD BROWNE-WILKINSON

My Lords,

7

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hobhouse of Woodborough. For the reasons he gives I, too, would allow the appeal.

LORD CLYDE

My Lords,

8

I have had the advantage of reading a draft of the speech of my noble and learned friend, Lord Hobhouse of Woodborough. For the reasons he has given, I, too, would allow this appeal.

LORD HUTTON

My Lords,

9

I have had the advantage of reading a draft of the speech of my noble and learned friend, Lord Hobhouse of Woodborough. I agree with it and for the reasons he has given I, too, would allow this appeal.

LORD HOBHOUSE OF WOODBOROUGH

My Lords

10

Mrs Norris, the appellant, is the wife of Clifford Norris, a convicted drug trafficker who is presently serving a sentence of 9½ years imprisonment passed upon him by Judge Brown at the Crown Court at Lewes on 24 June 1996. At the same time Judge Brown also made a confiscation order in the sum of £386,397, with 4 years imprisonment consecutive in default, under sections 1 and 6 of the Drug Trafficking Offences Act 1986. In February 1999 an ex parte application was made by HM Customs and Excise, the respondents to this appeal, to Latham J sitting as a judge of the High Court for the appointment of a receiver under s.11 of the Act and other orders. Latham J made the orders asked for on 4 February. One of the orders made was a declaration:

"that the defendant [Mr Clifford Norris] holds the beneficial interest in 7 Berryfield Close, Chislehurst Road, Bickley, Kent, title number SGL 42481".

7

Berryfield Close was the house in which Mrs Norris and her three sons lived. They had lived there since she bought it in May 1988. She was registered as having the unencumbered title to the property. The order also required any person having possession of Mr Norris's assets forthwith to deliver up the same to the receiver, subject only to a period of 28 days from the date of the order being allowed before the requirement to deliver up 7 Berryfield Close should take effect.

11

Mrs Norris had only heard about the ex parte application a few days before as the result of a telephone call from Mr Norris's solicitors. She attended the hearing before Latham J but it is not suggested that she was then in a position to take any part. She was not represented. Following the making of the order, she took legal advice. She swore an affidavit dated 4 March 1999, with accompanying exhibits, and applied for the order to be varied so as to recognise her title or interest in 7 Berryfield Close. Her application was met by the response from the Customs and Excise that it was an abuse of process for her to make any such application the matter having been concluded by the order of Judge Brown. Latham J upheld the objection of the Customs and Excise and dismissed Mrs Norris's application without considering its merits. Her appeal to the Court of Appeal was likewise dismissed [2000] 1 WLR 1094. She has appealed here with your Lordships' leave.

12

In order to explain the issue which arises on this appeal, it is necessary to refer in greater detail to the scheme of the 1986 Act and the procedural history. To take the statute first, its purpose is stated in the preamble to be "to make provision for the recovery of the proceeds of drug trafficking …". It was a new Act. Sections 1 to 5 deal with the making of what the Act calls "confiscation orders" (s.1(8)(a)). However, this is a misnomer. The orders are financial orders ordering a defendant convicted of a drug trafficking offence to pay sums of money to the State. Under the 1986 Act the order is to be made at the time of passing sentence and is subject to appeal to the Court of Appeal, Criminal Division, by the defendant as an appeal against sentence. When a defendant has been convicted of a drug trafficking offence, the statute requires the Crown Court, before sentencing him, to determine whether he has benefited from drug trafficking; this question is a general one and not confined to the offence of which he has been convicted. If the Crown Court concludes that he has benefited, it is then required to determine, in accordance with s.4, the amount to be recovered from the defendant and order him to pay that amount. It is this order to pay which is referred to as a "confiscation" order. S.4 requires the Crown Court to undertake a two stage process. First it must assess the value of the defendant's proceeds of drug trafficking: s.4(1). Secondly the court must decide whether the defendant has satisfied it that the amount which might be realised at the time the confiscation order is made is less than the value of the proceeds and, if it is so satisfied, then the order to be made is restricted to the lesser sum: s.4(3). The decision whether the defendant has benefited from drug trafficking and, if he has, the assessment of the value of those proceeds is to be made by the Crown Court making certain assumptions: s.2. These are, broadly, that, unless shown to be incorrect in the defendant's case, any property or money received by the defendant or any expenditure of the defendant, during the period of six years ending with the institution of the criminal...

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