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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Norris, Re [2000] EWCA Civ 14 (27 January 2000)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/14.html
Cite as: [2000] EWCA Civ 14
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Case No: QBC 1999/0400/4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (From the Order of
Mr Justice Latham)
Royal Courts of Justice
Strand, London, WC2A 2LL
Thursday, 27 January 2000
LORD JUSTICE STUART SMITH
LORD JUSTICE SCHIEMANN
and
LORD JUSTICE TUCKEY
IN THE MATTER OF CLIFFORD R NORRIS |
Respondent | |
- and - |
||
IN THE MATTER OF THE DRUG TRAFFICKING OFFENCES ACT 1986 |
||
-
and - |
|
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
Mr A Nicol QC & Mr S Cheetham (instructed by Saunders & Co solicitors for the Appellant)
Mr A Mitchell QC & Mr K Talbot (instructed by HM Customs and Excise solicitors)
Judgment
As Approved by the Court
Crown Copyright ©
Friday 28 January, 2000
LORD JUSTICE TUCKEY:
Introduction
Clifford Norris ("the Defendant") was convicted at the Lewes Crown Court of conspiring to import cannabis and related firearms offences and sentenced to 9½ years imprisonment. On the 24 June 1996 after conviction but before sentence the trial judge, Judge Brown, made a confiscation order against the Defendant in the sum of £386,397 under the provisions of the Drug Trafficking Offences Act 1986. At the hearing before this Order was made the appellant, who is the Defendant's wife, gave evidence that the matrimonial home ("the house"), which is in her name and in which she still lives, was her property and did not therefore form part of the Defendant's realisable property for the purposes of the 1986 Act. The Judge held that the house was beneficially owned by the Defendant and its realisable value, £300,000, therefore went to make up the Order which he made.
Nothing was paid under the confiscation order and so on the 4 February 1999 Latham J made an order in the High Court appointing a receiver to realise the Defendant's property. However, he left open the opportunity for the Appellant to apply to vary this order which she did with the benefit of legal representation on the 31 March 1999. Based on an affidavit from the Appellant containing substantially the same evidence as she had given in the Crown Court, Counsel on her behalf argued that she had an interest in the house and that this should be reflected in the court's order, including the powers which it gave to the receiver. Latham J decided that the Appellant could not re-open the issue of ownership of the house which had already been decided by the Crown Court. The Appellant appeals against this decision with the Judge's permission. The appeal raises a question of some importance since the matrimonial home is often the only substantial visible and realisable asset of a defendant convicted of a criminal offence for which a confiscation order may be made.
History
The 1986 Act, which applies to this case but which has now been replaced by the Drug Trafficking Offences Act 1994, sets out the steps which a court has to follow before making a confiscation order. Sections 1 to 4 require the court first to decide whether the defendant has benefited from drug trafficking and if so by how much. In this case the Defendant admitted that he had benefited to the tune of £1.3 million. The court has then to determine the value of the defendant's realisable property. This is defined by Section 5 as any property held by the Defendant or any gift caught by the Act. Where the value of the realisable property is less than the benefit, the confiscation order has to be made for this lesser amount.
The provisions of Section 5 (3) (4) and (5) make it clear that it is only the defendant's interest in any realisable property which has to be valued and taken into account. In other words the Act recognises any third party interest in the property under consideration and is only intended to confiscate the value of the defendant's interest in it.
At the confiscation hearing before Judge Brown the only issue was whether the house formed part of the Defendant's realisable property. It was the Defendant's case and the Appellant's evidence that it did not. He had given evidence at the trial but did not do so at this hearing. She was not represented at the hearing but was called by leading counsel for the Defendant and gave evidence and was cross-examined. Her evidence was substantially the same as that contained in her affidavit. Put shortly she said that she contributed to the purchase price of earlier matrimonial homes, the proceeds of which were used to buy the house where she now lives. Her evidence about this was quite detailed and was supported by documents which showed the sale and purchase prices of the various houses. Apart from one or two obvious inconsistencies I am quite unpersuaded that there is anything new of any importance in the affidavit as compared with the evidence which the Appellant gave in the Crown Court. At the end of this evidence leading counsel made submissions to the effect that the house belonged legally and beneficially to the Appellant or at least that she had a substantial interest in it. Judge Brown disbelieved the Appellant's evidence and rejected these submissions. He decided that all the money which had been used to buy the various houses had come from the Defendant and therefore the Appellant had no beneficial interest in the house. He proceeded to make the confiscation order against which the Defendant did not appeal.
Before the Defendant's trial the customs had obtained a restraint order from the High Court over the Defendant's property, including the house, under Section 8 of the Act. When the confiscation order was not met the Defendant was at risk of having to serve the 4 years imprisonment which the Judge imposed in default of payment and the customs invoked the provisions of Section 11 of the Act to enforce the order. Section 11 says:
Realisation of property
11. (1) Where -
(a) in proceedings instituted for a drug trafficking offence, a confiscation order is made,
(b) the order is not subject to appeal, and
(c) the proceedings have not been concluded.
the High Court may, on an application by the prosecutor, exercise the
powers conferred by subsections (2) to (6) below.
(2) The court may appoint a receiver in respect of realisable property.
(3) The court may empower a receiver appointed under subsection (2) above, under section 8 of this Act or in pursuance of a charging order -
(a) to enforce any charge imposed under section 9 of this Act on realisable property or on interest or dividends payable in respect of such property, and
(b) in relation to any realisable property other than property for the time being subject to a charge under section 9 of this Act, to take possession of the property subject to such conditions or exceptions as may be specified by the court.
(4) The court may order any person having possession of realisable property to give possession of it to any such receiver.
(5) The court may empower any such receiver to realise any realisable property in such manner as the court may direct.
(6) The court may order any person holding an interest in realisable property to make such payment to the receiver in respect of any beneficial interest held by the defendant or, as the case may be, the recipient of a gift caught by this Act as the court may direct and the court may, on the payment being made, by order transfer, grant or extinguish any interest in the property.
..........
(8) The court shall not in respect of any property exercise the powers conferred by subsection (3)(a), (5) or (6) above unless a reasonable opportunity has been given for persons holding any interest in the property to make representations to the court."
Section 13 (4) of the Act says that the powers contained in Section 11 shall be exercised with a view to allowing any person other than the defendant to retain or recover the value of any property held by him. Again this is a clear recognition in the Act of third party interests.
Applications to the High Court under this legislation are governed by Order 115. Rule 4 (3) required the restraint order to be served on the appellant and Rule 7(2) required the appellant to be given notice of the application under section 11. Rule 7 (4) (c) enables the court to make declarations in respect of the property interests which a receiver is empowered to realise. In this case, as well as the order appointing the receiver, Latham J made a declaration in accordance with the Crown Court's decision that the Defendant beneficially owned the house. In deciding that he could not re-open this issue the Judge followed the decision of Mr Justice Buxton (as he then was) in Re. K. (unreported : 3/7/1995).
Re. K. was a fraud case, but the provisions for making confiscation orders under the Criminal Justice Act 1988 were the same as those for drug cases in the 1986 Act. A number of third parties claimed interests in various properties which the prosecution contended were the defendant's realisable property. The third parties were not represented but they gave evidence in the Crown Court. The court rejected their claims. When the High Court was asked to appoint a receiver and confirm the Crown Court's findings by declaration they asked to re-open the issue as to their interests in the various properties. Buxton J held that they could not do so. He accepted the Crown's submission that:
"On the construction of the Act and the interaction of this whole procedure it is not intended in enforcement proceedings ... to re-open findings made by the Crown Court as to whether property is realisable and the ownership of it."
He said that the omission from the comparable provision in the 1988 Act to section 11(8) of comparable provisions to section 11(3)(c) and (4) meant that the comparable provision to section 11(8) was of limited effect. Even if he did have jurisdiction to re-open the Crown Court's findings he would not have done so in that case.
Submissions.
Mr Mitchell QC, counsel for the customs, does not seek to uphold the decisions of Buxton J and Latham J if and insofar as they say that the High Court has no jurisdiction in any circumstances to re-open the findings of the Crown Court on the application of a third party. Such an extreme position, he concedes, is contrary to the scheme of the legislation and likely to be in breach of Article 6 of the European Convention on Human Rights. I think this concession was rightly made. I do not, with respect, find Buxton J's reasons for saying that there is no jurisdiction at all convincing. A third party who clearly has an interest in the property but is unaware of the confiscation hearing should obviously be entitled to have the Crown Court's findings re-opened.
But Mr Mitchell submits that at the other end of the spectrum is the case where at the confiscation hearing the third party is separately represented, gives and calls evidence and makes submissions through counsel seeking to establish his or her property interest. The third party is disbelieved and the court finds that he or she has no interest in the property. In such circumstances he submits that the third party should not be allowed to make the same case on the same material in the High Court. This can and should be prevented by the court's power to prevent abuse of its process. Such an approach achieves finality and avoids re-litigation with the attendant risk of inconsistent findings in courts of equal jurisdiction. The instant case is at this end of the spectrum. The Appellant's interests were identical to those of the Defendant at the hearing in the Crown Court where the Appellant had the opportunity to give her evidence and have her case argued by counsel. The fact that she was not formally a party to the proceedings or represented is unimportant.
Mr. Nicol QC, counsel for the Appellant, starts from the position that the legislation clearly recognises third party interests and by section 11 (8) requires the High Court to give the third party an opportunity to make representations before a receiver may be appointed or the receiver is empowered to realise any realisable property. He buttresses these submissions by reference to Article 6 of the Convention and Article 1 of the First Protocol. However, I do not think a third party's rights, which are clearly defined by the 1986 Act, are enhanced by reference to the Convention, so I do not think it is necessary to consider the argument based on the Convention. Mr. Nicol submits that the Appellant could not have lost her rights under the Act merely because she gave evidence in the Crown Court. The role of a witness is fundamentally different from that of a party: a witness has no right to be represented, to make submissions or call other evidence on her behalf. Being a witness is no substitute for being given a proper opportunity to be heard in one's own right. Furthermore a witness has no right of appeal from a decision of the Crown Court which may affect his or her property interests. Whilst Mr. Nicol accepted that the High Court did have wide powers to prevent abuse of its process, he submitted that to prevent a non-party from putting their case was an unjustified extension of the principle and went further than the authorities on abuse justified.
Abuse of Process
In support of his submissions Mr. Mitchell relied on Hunter -v- Chief Constable (1982) AC 529. In that case Lord Diplock said at page 536 :
" The circumstances in which abuse of process can arise are very varied; .... It would in my view be most unwise if this house were to use this occasion to say anything that might be taken as limiting to fixed categories the kind of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power."
At page 542 he defined the applicable principle for cases such as the instant case by reference to statements in earlier authority. Thus a court should be slow to prevent a litigant from litigating his claim but :
"ought to do so when ........ it has been shown that the identical question sought to be raised has been already decided by a competent court."
and
"It would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again."
Later, at page 545, Lord Diplock said that where, as an exception to this general principle, it was sought to justify re-litigation on the basis of fresh evidence, the new evidence must be such as "entirely changes the aspect of the case". Mr. Mitchell conceded that a third party in the position of the Appellant could re-open in the High Court an issue decided in the Crown Court if they produced fresh evidence of this character. He also accepted that if the third party was able to demonstrate that the Crown Court's decision was plainly wrong in law that would be another reason which would justify the High Court re-opening the issue in question.
Mr. Nicol submitted that Ashmore -v- British Coal (1990) 2 QB 338 was the only reported case in which a non-party to earlier proceedings had been prevented from litigating a claim. In this case the applicant was one of many women who alleged they were being unfairly treated by their employers under the equal pay legislation. Sample cases were selected for decision by the Industrial Tribunal which rejected the claims. The applicant then sought to make such a claim herself. The Tribunal's decision to strike out her claim as an abuse of process was upheld by this court. The applicant was not a party to the sample proceedings but knew of them and could have applied to join them if she wished. This was therefore a case of multi-party litigation where the court might have to act exceptionally to prevent abuse of its process. But in the course of his judgment, after reviewing a number of authorities, Stuart-Smith LJ said that the categories of abuse are not closed and at page 352 :
".... it is dangerous to try and define fully the circumstances which can be regarded as an abuse of process ...... each case must depend upon all the relevant circumstances. "
Having regard to these authorities I conclude that there is no reason in principle why a third party in an appropriate case should not be prevented from re-litigating an issue which has been decided in proceedings to which he or she was not a party. If the third party has had a fair opportunity to put his or her case at the earlier hearing there is nothing unfair about this conclusion. Failure to give effect to this conclusion in an appropriate case would give rise to uncertainty, delay, duplication of proceedings where the court's time is a finite resource and the risk of inconsistent findings in courts of equal jurisdiction. These are the evils which the principle of abuse of process tries to prevent. This is particularly so in the context of this legislation which is designed to confiscate the realisable proceeds of drug trafficking in a summary and effective way.
Discussion and Conclusion.
The starting point must be section 11 (8) of the 1986 Act. Its terms are mandatory but only require the persons holding any interest in the property to be given a reasonable opportunity to make representations to the court. The court must be the High Court which is being asked to make one of the section 11 orders to which sub-section (8) applies. It is curious that sub-section (8) does not apply to sub-sections (4) or (3)(b) but the explanation for this is probably that possession may need to be obtained urgently to conserve property, whereas exercise of the other section 11 powers will have irrevocable effect. But I do not think this feature of sub-section (8) alters the plain meaning of the words. The requirement will obviously be satisfied if having been given notice of the application a third party chooses not to appear, If the third party does appear he or she is entitled to make representations including a request to re-open issues decided by the Crown Court. But the sub-section does not require the court to accede to such a request. It may do so if, for example, it is persuaded that there is fresh evidence which entirely changes the aspect of the case or that the Crown Court's decision was wrong in law. It will do so in the obvious case where, for example, the third party has not been heard and has a good arguable claim to the property in question. But in a case where the third party has had a fair opportunity to put his or her case to the Crown Court and is asking to re-litigate issues decided in the Crown Court on the same or substantially the same evidence and submissions, the High Court does not and, in my judgment, should not agree to do so. This is an abuse of process. In such a case the High Court will obviously have to consider whether the third party has had a fair opportunity of putting his or her case before the Crown Court. In this respect I do not attach great importance to the fact that the third party is not a party to the criminal proceedings. Where the third party participates in the Crown Court hearing the likelihood is that he or she will be making common cause with the defendant. The typical case will be that of husband and wife. In such a case the third parties' interests are fully represented through the defendant. True it is that the defendant has a right of appeal against any confiscation order which is made to the Court of Appeal Criminal Division and the third party does not. However, in practice, the defendant has little or no prospect of appealing against findings of fact made by the Crown Court. As I have said, an error of law by the Crown Court would be a reason for re-opening the issue in question in the High Court on the application of the third party if the defendant did not appeal.
So with these considerations in mind I turn to the facts of this case. Here the Appellant and the Defendant were making common cause about their respective interests in the house. The Appellant gave evidence which is substantially the same as the evidence she wants to give if the issue is re-opened. In the Crown Court her interests were adequately represented by leading counsel for the Defendant. In this way she had a fair opportunity to put her case. She was at no real disadvantage by not being a party to the criminal proceedings. Her evidence was disbelieved. I think it would clearly be an abuse of process to enable her to re-litigate in the High Court the issues which were before the Crown Court in the hope that some other judge would accept her evidence and reach a different conclusion on substantially the same evidence. This is exactly the situation which the doctrine of abuse of process is designed to prevent.
Accordingly I think the Judge was right to refuse to vary the order which he made on 4th February 1999 and so this appeal should be dismissed.
LORD JUSTICE SCHIEMANN: I agree.
LORD JUSTICE STUART SMITH: I also agree.