QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| IN THE MATTER OF THE COMMISSIONERS OF INLAND REVENUE AND|
PETER JOSEPH JOHN PIACENTINI
SARA ELIZABETH DAYMAN
IN THE MATTER OF THE CRIMINAL JUSTICE ACT 1988 AND THE TAXES MANAGEMENT ACT 1970
Mr James Dennison (instructed by Solicitor of Inland Revenue, Somerset House, Strand, London WC2R 1LB) for the Commissioners of Inland Revenue
The Defendant did not appear and was not represented
Hearing date: 19th December 2002
Crown Copyright ©
Mr Justice Lightman:
"74(1) In this Part of this Act 'realisable property' means, subject to subsection (2) below...
(a) any property held by the defendant; and
(b) any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act….
(3) For the purposes of this Part of this Act the amount that might be realised at the time a confiscation order is made is...
(a) the total of the values at that time of all the realisable property held by the defendant, less
(b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations.
together with the total of the values at that time of all gifts caught by this Part of this Act.
(4) Subject to the following provisions of this section, for the purposes of this Part of this Act the value of property (other than cash) in relation to any person holding the property...
(a) where any other person holds an interest in the property, is...
(i) the market value of the first-mentioned person's beneficial interest in the property, less
(ii) the amount required to discharge any incumbrance (other than a charging order) on that interest; and
(c) in any other case, is its market value….
(9) For the purposes of subsection (3) above, an obligation has priority at any time if it is an obligation of the defendant to...
(a) pay an amount due in respect of a fine, or other order of a court, imposed or made on conviction of an offence, where the fine was imposed or order made before the confiscation order; or
(b) pay any sum which would be included among the preferential debts (within the meaning given by section 386 of the Insolvency Act 1986) in the defendant's bankruptcy commencing on the date of the confiscation order or winding up under an order of the court made on that date. "
"(1) Subject to subsection (2) below … the proceeds of the realisation … of any property under section 77 or 80 above … 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' chief executive] on account of an amount payable under a confiscation order shall reduce the amount so payable, but the [justices' chief executive] shall apply the money received for the purposes specified in this section and in the order so specified.
(4) The [justices' chief executive] shall first pay any expenses incurred by a person acting as an insolvency practitioner and payable under section 87(2) below but not already paid under subsection (1) above.
(5) If the money was paid to the [justices' chief executive] by a receiver appointed under this Part of this Act or in pursuance of a charging order, the justices' clerk shall next pay the receiver's remuneration and expenses.
(6) After making...
(a) any payment required by subsection (4) above; and
(b) in a case to which subsection (5) above applies, any payment required by that subsection,
the [justices' chief executive] shall reimburse any amount paid under section 88(2) below.
(7) The [justices' chief executive] shall finally pay any compensation directed to be paid out of any sums recovered under the confiscation order under section 72(7) above.
(8) Any balance in the hands of the [justices' chief executive] after he has made all payments required by the foregoing provisions of this section shall be treated for the purposes of [section 60 of the Justices of the Peace Act 1997] (application of fines, etc) as if it were a fine imposed by a magistrates' court…."
"(2) Any amount due in respect of the remuneration and expenses of a receiver so appointed shall, if no sum is available to be supplied in payment of it under section 81(5) above, be paid by the prosecutor or, in a case where proceedings for an offence to which this Part of this Act applies are not instituted, by the person on whose application the receiver was appointed."
"Exercise of powers by High Court or receiver
(1) This section applies to the powers conferred on the High Court by sections 77 to 81 above or on the Court of Session by sections 90 to 92 below, or on a receiver appointed under this Part of this Act or in pursuance of a charging order.
(2) Subject to the following provisions of this section, the powers shall be exercised with a view to making available for satisfying the confiscation order or, as the case may be, any confiscation order that may be made in the defendant's case the value for the time being of realisable property held by any person by the realisation of such property….
(3) In exercising those powers, no account shall be taken of any obligations of the defendant … which conflict with the obligation to satisfy the confiscation order."
(1) in satisfaction of the expenses of an insolvency practitioner payable under section 87(2) so far as they are unpaid under section 81(1): see section 81(4);
(2) in payment of the receiver's remuneration and expenses: see section 81(5);
(3) in reimbursement of the sum paid to the receiver under the indemnity provided for under section 88(2): see section 81(6).
"75 (1) A receiver appointed by any court in the United Kingdom which has the direction and control of any property in respect of which income tax is charged in accordance with the provisions of the Income Tax Acts shall be assessable and chargeable with the tax in like manner and to the like amount as would be assessed and charged if the property were not under the direction and control of the court.
(2) Every such receiver shall be answerable for doing all matters and things required to be done under the Income Tax Acts for the purpose of assessment and payment of income tax.
77. (1) This part of this Act….shall apply in relation to capital gains tax as it applies in relation to income tax…."
"The receiver in fact receives the proceeds of all the assets of the company, whether they are capital or income, and in receiving the proceeds of assets which are income assets he receives the income within the meaning of that rule. My attention was drawn by Mr Stamp to r. 15 of the General Rules applicable to All Schedules, which provides expressly that: 'A receiver appointed by' the Court 'shall be assessable and chargeable with tax in like manner and to the like amount as would be assessed and charged if the property were not under the direction and control of the Court'. That rule appears to me to contemplate that a receiver other than a receiver appointed by the Court would be assessed and charged in the ordinary course, being the person who received the income under Miscellaneous rules, r.1, and r. 15 is introduced for the purpose of providing that a receiver appointed by the Court shall be assessed and charged in the same way, although being under the direction and control of the Court he might be said not to be in receipt of the income. My attention was also drawn to the fact that the receiver is the occupier for the purpose of rating, and that on his appointment there is a change of occupation, and the case of Richards v. Overseers of Kidderminster (1) was referred to…."
EXPENSES OF RECEIVERSHIP
"(1) The assets of a company in a winding up by the court remaining after payment of the fees and expenses properly incurred in preserving, realising and getting in the assets … shall, subject to any order of the court, … be liable to the following payments which shall be made in the following order of priority, namely: … Next ['the fifth paragraph'] the necessary disbursements of any liquidator appointed in the winding up by the court, other than expenses properly incurred in preserving realising or getting in the assets heretofore provided for …"
"The court may in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the court thinks just."
"If in consequence of the realisation the company incurs a liability, the discharge of such liability must in my judgment constitute a charge or expense incurred in the winding up within section 267 of the Companies Act 1948 and must also, in my view, fall within rule 195."