England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO
TO APPEAL AND AN EXTENSION OF TIME

		Royal Courts of Justice Strand London WC2 Wednesday, 12th December 2001

1. LORD JUSTICE LAWS: This is a renewed application for permission to appeal against a decision of Penry-Davey J given on 9th February 2001. I refused permission on the papers on 4th October 2001. On 9th February, when the applicant represented himself, the learned judge below refused his application for a certificate of inadequacy under section 83 of the Criminal Justice Act 1988.
2. On 3rd December 1998, at the Stafford Crown Court, the applicant had been convicted of conspiracy to cheat Her Majesty's Customs & Excise. He was sentenced to five years six months' imprisonment, together with a concurrent sentence of three months for a contempt offence. At the same time a confiscation order was made in the sum of £18,000, with 12 months' imprisonment consecutive in default.
3. Dealing with the application on 9th February 2001, Penry-Davey J said, in paragraph 3:

"I have heard his representations, which essentially confirmed what he has set out in his affidavit, namely that the confiscation order was made on the basis that property which had been given to Mr P's former wife, namely a watch and a car, would be available for same, presumably in order to meet the requirements of the confiscation order. I understand from what Mr P has told me this morning that he has already sought at some time in the past to appeal the confiscation order, but that appeal was not allowed and was unsuccessful."

4. The applicant's case on the merits before the learned judge was that his former wife simply would not be persuaded to sell the property in question. The learned judge proceeded to set out what are in fact provisions contained in section 83(1) and (2) of the Criminal Justice Act 1988, but because of some error, perhaps to do with his word processor, he referred to the Powers of Criminal Courts (Sentencing) Act 2000, which deals with other matters altogether.
5. However, the textual quotation is correct, and I repeat it here:

"83(1) If, on an application made in respect of a confiscation order by -

(a) the defendant...

the High Court is satisfied that the realisable property is inadequate for the payment of any amount remaining to be recovered under the confiscation order, the court shall issue a certificate to that effect, giving the court's reasons.

(2) For the purposes of subsection (1) above -

...

(b) the court may disregard any inadequacy in the realisable property which appears to the court to be attributable wholly or partly to anything done by the defendant for the purpose of preserving any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Act from any risk of realisation under this Act."

6. Mr Berkley, who appears for the applicant today, accepts, plainly rightly, that the gifts in question here were realisable property within the meaning of the statute. They were so on the facts by force of section 74(1)(b) of the Criminal Justice Act. Penry-Davey J continued, in paragraph 5:

"Mr P submits both through his affidavit and in his oral submissions to me that though he acknowledges that these gifts were made to his wife, and it appears gifts made during the material period, in the sense that they were during the period of the conspiracy to cheat, that because, unexpectedly, his wife has refused, and continues to refuse, effectively to allow those items to be sold for the purpose of paying the confiscation order, he submits that for that reason he is not in a position to pay the confiscation order and, more particularly on the basis that the original order was made on the understanding that those assets would be available, that the court should grant a certificate of inadequacy in this case.

6. To that Mr Gregory on behalf of HMCE essentially submits that the legislation is deliberately draconian and that this property was defined by the crown court as realisable property for the purposes of the confiscation order because it came within the gift provisions of the then Act as part of the applicant's, Mr P's, realisable property. Further, Mr Gregory submits that the availability of that property, or the recoverability of that property, is, in view of the wording of the legislation, neither here nor there, because the legislation is intended to be draconian and to recover the proceeds of crime.

7. He relies on the case of R v Liverpool Magistrates' Court ex parte Ansen [1998] 1 All ER 692. Part of that case was concerned with an application for a certificate of inadequacy. It was in fact a case under the Drug Trafficking Offences Act where a confiscation order had been made. However, I read the relevant part of the headnote:

'The applicant also applied for a certificate of inadequacy under section 14(1) of the 1986 Act, submitting that his realisable property was inadequate for the payment of the amount remaining to be recovered under the confiscation order. He contended that most of his property was not realisable and, in particular, that he had been unable to recover £8,500 which he had paid to an agent in Germany towards the purchase of a house in Turkey, and that it was unrealistic to expect repayment of two other deposits he had made of £950 and £3,635. At the date of the hearing of the application it was agreed that the sum of £7,300 remained unpaid under the confiscation order.

'Held - (2) For the purposes of the 1986 Act, the fact that an asset might be difficult to realise was not relevant... Moreover, the fact that the definition of "realisable property" in section 5(1) included gifts caught by the Act meant that circumstances might arise where gifts which an applicant had made might be practically or legally irrecoverable, but were nevertheless still regarded as realisable property under the Act. It followed that since the sums of money referred to by the applicant were sums to which he was entitled, they were realisable property'."

7. The learned judge then set out certain passages from the judgment of May J (as he then was) in the case of Ansen. With respect, I need not repeat those. The headnote, I apprehend, is a fair summary of the Divisional Court's holding.
8. Accordingly, Penry-Davey J concluded that there was no basis for granting the certificate of inadequacy and dismissed the application. Although the learned judge set it out, it seems to me (and Mr Berkley agrees) that section 83(2)(b) is not, at any rate not directly, in point in this case. This is not a case in which on any version of the facts it is suggested that the defendant/applicant has himself done anything for the purpose of preserving the property held by his wife, to whom it had been given.
9. The plain fact is that the gifts were part of the realisable property here, and Mr Berkley says nothing to the contrary. He submits, however, that because his client's wife refuses to sell them, they cannot or should not be regarded as "adequate" for the payment of any amount remaining to be recovered under the confiscation order within the terms of section 83(1).
10. I disagree. Once property in the form of a gift is shown to be realisable property, then whether or not it can in fact be realised is a question wholly irrelevant to the issue whether it is to be treated as inadequate for the payment of any amount for the purposes of section 83(1)(a). The statute is, as was submitted by Mr Gregory before Penry-Davey J, deliberately draconian. Its policy is that if a defendant-to-be makes a gift later caught within the meaning of realisable property for the purposes of the confiscation order provisions, then he is fixed with that realisable property as a basis for a proper confiscation order, whether or not he is in fact later able to realise the property.
11. It is all too easy to envisage circumstances in which gifts are made and credible evidence is later given that they cannot be realised. To accede to Mr Berkley's short and elegant and helpful submissions would simply be to undermine the policy of the statute. In those circumstances, it seems to me that Penry-Davey J was quite right to dismiss the application before him, and I will dismiss the application for permission.
12. I should say that there has been some debate as to whether or not an application for a certificate of inadequacy falls to be described as a criminal cause or matter for the purpose of the appropriate appellate jurisdiction. I do not distinctly hold that this is not a criminal cause or matter, though I consider that the better view is that it is not. Assuming it is not, I would refuse permission to appeal on the merits.
13. I indicated to Mr Berkley that I was not impressed with the timetable put in to explain the long delay in this case. I remain unimpressed with it, but I have reached my decision on the merits.
Order: Application dismissed; no order as to costs.