England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		4 November 2010

1. LORD JUSTICE RICHARDS: The court has before it an application for judicial review of a decision of District Judge Zara, sitting at the Birmingham Magistrates' Court on 3 November 2009, to commit the claimant to prison for failure to pay the sums due under a confiscation order.
2. I can deal with the matter briefly because, as a result of a recent development, it is not in issue between the claimant and the interested party, the Department for Work and Pensions, that the district judge's order should be quashed.
3. The background is that the claimant was convicted on two counts of cheating the public revenue. A sentencing hearing took place at Coventry Crown Court on 30 September 2005. The claimant was given a 12 month suspended sentence, concurrent, on each of the two counts and he was ordered to pay a sum by way of compensation. A confiscation order was made against him in the sum of £135,524.60, to be paid within 2 years of the date of the order, that is by the end of October 2007, with 3 years' imprisonment in default of payment.
4. At the time of the order the claimant had already been adjudged bankrupt. He appealed against the order on the ground, amongst other things, that he had no control over his assets which were in the hands of his trustee in bankruptcy. That appeal was dismissed by the Court of Appeal Criminal Division in March 2009. The court's judgment (see [2009] EWCA Crim 831) provides a fuller background to the case than I need give for present purposes. It held that the bankruptcy did not affect the making of the confiscation order but the observation was made that it might restrict the enforcement of the order.
5. In the event the claimant did not pay the sum due under the confiscation order. Enforcement proceedings were commenced against him and were the subject of a number of adjournments. He was ordered to pay, and did pay, small periodic amounts, but these were not sufficient to cover even the interest on the primary sum. By the time of the district judge's decision to commit, the total amount outstanding, including interest, was over £157,000.
6. The district judge considered there to be no realistic prospect of the trustee in bankruptcy realising enough to pay the claimant's creditors, let alone to meet any of the claimant's liability under the confiscation order. The claimant had made no application to date for a certificate of inadequacy, although it remained possible that he might do so. In the circumstances, given the failure to pay the sums due under the order and the absence of any good reason for delaying further, the district judge ordered the claimant's committal to prison for the default period of 3 years specified in the Crown Court's order.
7. The claimant brought judicial review proceedings in respect of that decision. Sir George Newman, sitting as a Deputy High Court Judge, granted permission to apply for judicial review and also granted bail. It seems that at the hearing before him counsel and solicitors for the claimant undertook to apply, or at least indicated an intention to apply, on the claimant's behalf for a certificate of inadequacy. That course was duly followed.
8. The confiscation order had been made under Part 6 of the Criminal Justice Act 1988 and it is the procedures under that Act, rather than under the Proceeds of Crime Act 2002 which has replaced it, which are relevant. An application was made to the Administrative Court under section 83(1) of the Criminal Justice Act 1988 for a certificate of inadequacy. On 29 October 2010 Calvert Smith J granted a certificate in these terms; I read from the draft order because a sealed order is not yet available:

"It is certified that the value of the claimant's realisable property is inadequate for the payment of £135,524.60, the amount remaining to be recovered under the confiscation order made against the claimant by the Crown Court of Coventry on 30 September 2005, plus any interest which has accrued on the outstanding balance, for the following reasons:

(1) The claimant was judged bankrupt on 1 September 2005 and all assets thereby were vested in the trustee in bankruptcy who has indicated, in a letter dated 25 September 2009, that no funds will be available for return to the debtor.

(2) The [applicant] has no further assets which could be used to satisfy the confiscation order."

9. The effect of the certificate is that the claimant can now apply to the Crown Court under section 83(3) of the 1988 Act for the amount to be recovered under the confiscation order to be reduced. Given the terms of the certificate of inadequacy, it seems likely that the amount recoverable will be reduced to nil, but that will be a matter for decision by the Crown Court in the light of the evidence before it.
10. The circumstances as they existed at the time when the district judge made his order for committal have plainly been transformed by the certificate of inadequacy. The submission made on the claimant's behalf, and accepted by the interested party in writing, is that, in the light of the certificate of inadequacy, the district judge's decision should be quashed. I agree.
11. There is the further question whether the court should simply let the matter rest there without any remittal to the Magistrates' Court following the quashing of the district judge's decision. In written submissions, Mr De Mello submitted that that would be the appropriate course. He has very sensibly modified his position for the purposes of this hearing. It seems to me that there is great difficulty in the submission that the court should simply let the matter rest by quashing the decision and not remitting the case to the Magistrates' Court. At present, the confiscation order is still in place, and it will remain so unless and until it is varied on an application for that purpose to the Crown Court. Such an application will no doubt be made but has not yet been made. Further, the enforcement proceedings in respect of the existing confiscation order remain in being. It seems to me that, in those circumstances, the right course must be to remit the matter to the Magistrates' Court. It may be that the interested party will discontinue the enforcement proceedings and the matter will come to an end that way. Alternatively, it will come back before the district judge who will be able to make a fresh decision in the light of the circumstances existing at the time of that decision. Either way, remittal will enable the loose ends to be tidied up. It is better to do that than to leave things hanging in the air.
12. For those reasons, I would quash the district judge's decision of 3 November 2009 and would remit the matter to the Magistrates' Court.
13. MR JUSTICE CRANSTON: I agree.
14. MR DE MELLO: My Lord, the claimant is publicly funded. May I have the normal order?
15. LORD JUSTICE RICHARDS: Yes. Certificate for public funding purposes?
16. MR DE MELLO: That is right. I also, in my submissions, had submitted that the costs should be paid out of central funds, but I do not know if that is a matter which you will take into account or leave it as it is.
17. LORD JUSTICE RICHARDS: I think we will make the order we have already indicated.
18. MR DE MELLO: Certainly. The claimant has answered bail, he is here.
19. LORD JUSTICE RICHARDS: We should therefore extend bail until the next hearing before the Magistrates' Court.
20. MR DE MELLO: Your Lordships could consider doing that, yes.
21. LORD JUSTICE RICHARDS: I think that is probably the right course.
22. MR DE MELLO: Well, your Lordships could have taken the view that --
23. LORD JUSTICE RICHARDS: Well, I suppose, the committal order having been quashed, perhaps we do not need to extend bail. That means that, unless and until there is a further order for committal, he is free.
24. MR DE MELLO: He is free, and the magistrates may decide to reinstate the matter on the list in the normal way.
25. LORD JUSTICE RICHARDS: Yes. In that case we need say nothing about bail.
26. MR DE MELLO: I am grateful.
27. LORD JUSTICE RICHARDS: Thank you very much.