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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> M, R (on the application of) [2008] EWHC 2226 (Admin) (24 June 2008)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2008/2226.html
Cite as: [2008] EWHC 2226 (Admin)
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QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Strand London WC2A 2LL |
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B e f o r e :
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| THE QUEEN ON THE APPLICATION OF M |
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Miss A Chaudray appeared on behalf of the Defendant
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- MR JUSTICE CRANSTON: This is an application for a certificate of inadequacy.
- The background is that in April 2004 the defendant was convicted of three counts of being concerned in the supply of a class A drug, namely heroin. He was convicted after a trial and sent to prison for 6 years. He has subsequently been released. His licence period has also expired.
- In October 2004 he was made subject to a confiscation order. The confiscation order was in the amount of £64,707.58. The full benefit figure was £82,000 but the realisable asset figure of £64,707.58 was decided on after a contested hearing before a judge who made the confiscation order. It took into account certain cash amounts and a bank account; the equity in a property, 38 Lingfield Close; and thirdly, there was an amount received in relation to the sale of a Golf car of £7,500. The defendant was ordered to pay and did pay a sum of £10,000 by 21 October 2004. The £10,000 basically reflected the cash and the amount of money in the bank account. That left an outstanding amount. That outstanding amount now, with interest, is in the sum of £51,192.29. It is calculated on the basis of the original sum, less the cash and the bank account moneys but also less £15,000 which was paid over on the sale of the property. The property was sold in June 2005 and the net redemption figure available for the defendant was £42,723.88. That amount was largely paid away in the manner I shall describe in a moment. In essence the CPS says that the defendant has failed to give a proper explanation of those payments and that a certificate of inadequacy cannot be justified.
- The law in this area is draconian. The relevant statute that applies to this case is the Drug Trafficking Act 1994, although its provisions in this respect have been replaced by subsequent legislation. But in relation to Section 17, which is the certificate of inadequacy provision, this court has to be satisfied that the realisable property is inadequate for the repayment of any amount remaining to be recovered.
- A number of key points follow from the authorities. First, it is not possible to re-argue matters that have already been dealt with at the confiscation hearing; this is not an appeal. It is not possible, for example, for the defendant to try to make good deficiencies in the case that was presented at the time of the confiscation hearing. Another important point is that if a defendant comes along to court and says his assets are inadequate then he must, as it is said, condescend to demonstrate what has happened since the making of the order. To put it another way he must show what has happened to the realisable property or part of it. It was said in a leading case - R v Walbrook and Glasgow [1994] Crim LR 612 - that vague and generalised assertions unsupported by evidence will rarely be sufficient to discharge the burden on the defendant. The burden is on the defendant to prove that, on the balance of probabilities, his property is inadequate for the payment of the confiscation order.
- The matter comes before me this afternoon. There have been delays over the last two years. As Mr Southey explained at the outset, there are reasons for that delay. I need say no more about them.
- There are various issues. Let me take them in turn. The first is that there was a shortfall in the value of the house when it was sold compared with what it was expected to realise at the time of the confiscation order. The shortfall - I think it is accepted on both sides - needs to be taken into account. The amount was £3,706.12.
- There is then a figure of £6,000 which was paid after the confiscation order, both in relation to the mortgage and also in relation to work that the defendant's father said he undertook on the property. The defendant's father gave evidence himself this afternoon. He explained that it was necessary, first of all, to do work on the house if it was going to be sold. So he did certain decorating and he repaired the fence and gate. He took money from the sale proceeds to represent mortgage payments and the payment to himself, not only for the material he used but also at a rate of £100 a day. He gave evidence that the house really could not be sold in its condition with its fence and gate broken.
- I have listened very carefully to Miss Chaudray's submission in relation to the evidence of the defendant's father. She says, first of all, that at the confiscation hearing the judge did not accept the evidence that he gave. I also have taken into account the submissions that she makes in relation to the lack of documentation. But these mortgage payments were made, and I am prepared to accept the evidence of the defendant's father that he made them. I also accept his evidence that he did necessary work on the house so as to make it saleable.
- The issue for me is how these payments are to be characterised in the context of an application for a certificate of inadequacy. As well as to Section 17 itself, Miss Chaudray referred me to Section 6 (2), which defines realisable property as including any property held by a person to whom the defendant has made a gift caught by the Act. Otherwise counsel could not refer me to any relevant legal analysis.
- In my judgment, this £6,000 was not a gift. The payments it represented were given for good consideration. The payments of the mortgage and also for the work done were to preserve the value of the house. If the mortgage payments had not been made they would have been deducted on sale from the redemption figure. I also accept Mr Southey's submission that the work done was to ensure that the house was saleable. So notwithstanding the fact that there was a lack of documentary evidence, and notwithstanding the fact that these points were not raised earlier, I accept the account given by the defendant's father, PM Snr.
- The next point - and it is perhaps the most important point - arises in relation to a payment of the £21,000. This payment was, in the applicant's case, made from the proceeds of sale of the property to former criminal associates of the defendant. In the account he gave - and this is now advanced subsequent to the confiscation hearing where there was simply a reference to repayment of a loan - these amounts were paid following threats which, in the defendant's account, took written and verbal form. One letter has been produced to the court. It is said there were verbal threats to his family as well.
- This, in factual terms, is a troubling area. Miss Chaudray says there is no evidence that these threats were made or that these payments were made. She takes me back to the authorities. She says that it is not sufficient for an applicant simply to make bland and unsupported assertions in relation to the inadequacy of an asset. She says that there is no bank statement or building society statement or similar documentation to support these assertions. She says that given the adverse findings of credibility at the confiscation hearing, it is not open to me to accept the account which the defendant has given this afternoon.
- Nonetheless I do and I accept Mr Southey's submission that I must take into account the context, that we are living in a different world in this court from what happens on certain estates in Liverpool and in the particular area of criminal activity that the applicant was engaged in. Bank statements, as Mr Southey rightly says, are simply not going to help in this regard. That is the context in which I need to consider the defendant's evidence. Having done so I am satisfied to the requisite standard that what he says is true. It is supported by his father and for reasons which became apparent during the hearing the father did not need to support his son in this respect. Threats were made and as a result the defendant paid out.
- However, as a matter of law I cannot regard these payments to criminal associates - in total of £21,000 - as not being gifts. There is no definition of "gift" in the legislation and therefore it is a matter of trying to give sense to that term as used. It seems to me that the law simply does not countenance something as a gift where it is not legally obliged even if it may have been paid out as a result of threats. Mr Southey submitted that the terms of Section 17 did not prevent account being taken of payments made under threat, which in his submission is not surprising since duress is a defence to all. Parliament cannot have intended that a person should put their family at risk so that the state can get its money.
- However unrealistic it might seem in Liverpool, in my view the sums clearly ought not to have been paid and the threats should have been reported to the police. That may not seem to accord with the reality for Mr M of what happened - and what I accept on the balance of probabilities has happened - but the law could not countenance a situation where this is not regarded as a gift. Since the defendant could have reported the threats and in theory obtained protection there was no duress. In my view, as a matter of policy, it cannot be the case that such payments can escape from the effect of the legislation. As a matter of law these payments cannot qualify in an application for a certificate of inadequacy.
- That being the case, it seems to me that the £6,000 can feature in relation to a certificate of inadequacy; the shortfall in the value of the house, the £3,776.12, can also be taken into account; but it is not possible to take into account the £21,000.
- The final matter relates to the £7,500 from the sale of the car. It was not advanced in Mr Southey's oral submissions this afternoon. It seems to me that there is no way that I can conclude other than that amount is a matter that has been conclusively dealt with at the confiscation hearing. No further explanation has been given. Therefore the application in that regard must fail.
- MR SOUTHEY: I may be being slightly dense. In relation to your Lordship's judgment, I am not clear whether your Lordship is satisfied that it is appropriate to issue a certificate of inadequacy, whether you are saying the £7,500 is unexplained and on the balance of probabilities we have not (?) met our task of demonstrating that the realisable property was inadequate or are you saying the 6 and £3,500 demonstrates that there is an inadequacy albeit in that relatively small sum?
- MR JUSTICE CRANSTON: I am saying that there is a basis for a certificate in the small amount, the £6,000 payment to the father but also the £3,000 shortfall in the property sale.
- MR SOUTHEY: Thank you. I would seek permission to appeal in relation to the case. Your Lordship has had to deal with a difficult issue which is material as to your Lordship's findings which is what is meant by "gift" in this context. I think both parties were agreed that there was no authority we were aware of in relation to this. It clearly is an important issue which, as I say, is material on the facts of this case. I am not sure that there is much I can say in relation to that. Your Lordship will have formed an assessment of the relevant merits of the arguments. We would submit that it is appropriate to go further.
- MR JUSTICE CRANSTON: I think it is a matter for others.
- MISS CHAUDRAY: I think my friend asked the question I would have asked in relation to the issue - - there are grounds you can issue a certificate of inadequacy. Is that right? I believe you are saying that you are satisfied to issue a certificate of inadequacy in respect of the specific - - - - -
- MR JUSTICE CRANSTON: Just the £6,000 and the shortfall of £3,000.
- MISS CHAUDRAY: Clearly substantive arguments in relation to those will have to be argued.
BACKGROUND
LEGAL FRAMEWORK
THE ISSUES