England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand London WC2A 2LL
		26 June 2013

1. MR JUSTICE HADDON-CAVE: On 12 February 2008 HHJ Plumstead, sitting at St Albans Crown Court, made a confiscation order against the applicant Phillip Kole-Emmanuel under s.71 of The Criminal Justice Act 1988. The confiscation was made in respect of Mr Kole-Emmanuel's receipt of large sums of money from widespread benefit fraud. The benefit figure agreed by the parties was assessed at £1,043,070.26 and the realisable amount £452,416.69. A confiscation order was made in the latter figure. Mr Kole-Emmanuel was ordered to satisfy the confiscation order within 9 months. A period of 3 months' imprisonment in default of the payment was imposed.
2. Payment was not made. Enforcement proceedings were instituted by the respondent, the Department for Work and Pensions, on 9 October 2008 at Dover Magistrates' Court. On 9 October 2008, at Dover Magistrate's Court Mr Kole-Emmanuel's case has adjourned. Enforcement proceedings pending the result of an application for a certificate of inadequacy was refused.
3. The sentence in default was activated. Mr Kole-Emmanuel then served a 3 year default sentence. On 27 May 2010, Mr Kole-Emmanuel made an application for a certificate of inadequacy. Following argument and evidence the application was dismissed by Coulson J and the applicant ordered to pay costs.
4. Today before me, Mr Kole-Emmanuel, through his legal advisers makes a further application for a certificate of inadequacy on the basis that he has insufficient assets to satisfy the confiscation order that was originally made by HHJ Plumstead at St Albans on 12 February 2008.
5. In his helpful and succinct submissions for the applicant, Mr George Crivell prays-in-aid the fact that Mr Kole-Emmanuel was declared bankrupt and that the official receiver in his report of 4 May 2012 has assessed Mr Kole-Emmanuel's assets as (net) £400. Total liability is £108,000. Mr Crivell submits that this is clear evidence of the applicant's current asset position such as to justify the granting of a certificate of inadequacy.
6. Mr Crivell submits in the alternative, that if the court is minded not to grant a certificate of inadequacy at this stage then it should adjourn the matter in order to enable the applicant to liaise with the official receiver and obtain further clarification and evidence.

Principles

7. The principles to be applied on an application for a certificate of inadequacy are well known and well rehearsed. They are very helpfully set out by King J in F & Anor, Re [2009] EWHC 2512 (Admin) paragraph 6, 7 and 8.
8. It is also worthwhile having regard to the observations of Moses LJ in Telli v Revenue and Customs Prosecutions Office [2007] EWCA Civ 1385, where Moses LJ says at paragraph 37:

"[...] it is incumbent upon a court to assess the current value of the realisable assets' realisable property in order to determine whether it is inadequate to leave the outstanding sum. Once it is appreciated that the property held by the defendant included unidentified assets forming part of the total value of the realisable property at the time of the order, it is impossible for Telli to establish that the realisable property is inadequate now to meet payment of the outstanding amount [...]"

Submissions

9. In his helpful submissions for the respondent, Mr William Davis of counsel makes the following submissions: First, that there was clear evidence of hidden assets in this case which was evident before his HHJ Ponsonby and was rehearsed before Coulson J. In particular, he pointed out there was reference to a Lloyds TSB account through which £151,358 had passed; there was no clear evidence from Mr Kole-Emmanuel as to what had happened to that particular sum.
10. Secondly, Mr Davis relied upon the official receiver's report. It is clear from the official receiver's report that the official receiver has taken at face value the assertion by Mr Kole-Emmanuel that his insolvency is attributable to:

"His unemployment, which has left him unable to repay his debts."

11. There has been no meeting of creditors, and at this stage no in-depth trawl for any assets of Mr Kole-Emmanuel. Mr Davis says that, in those circumstances, it is not sufficient for the applicant simply to point to this certificate of bankruptcy as discharging his burden of proof, or providing proof positive that he does not in fact have currently realisable assets such as to satisfy the original confiscation order.
12. Mr Davis very fairly also submits that he is agnostic on the question of whether or not there should be an adjournment on the matter as requested by Mr Crivell in order to give Mr Kole-Emmanuel an opportunity to apply to the official receiver for further evidence and clarification.

Analysis

13. It is axiomatic in cases such as this that the burden of proof lies very firmly on the applicants to prove on the balance of probabilities that his realisable property is inadequate for the payment of the confiscation order, see O'Donoghue (James Keith), Re [2004] EWCA Civ 1800 per Laws LJ at paragraph 3.
14. As emphasised by Moses LJ in Telli (supra):

"It is incumbent once it is clear that the property held by the defendant includes 'unidentified' assets, as part of the total value of realisable property at the time of the order. It may be impossible for the applicant to establish that realisable property is inadequate to meet the payment of the outstanding amount."

15. In the present case, there in clear evidence of hidden assets. This is also a case in which the figures as to the benefit assessed and the realisable amount were agreed by Mr Kole-Emmanuel at the original confiscation hearing on 12 February 2008.
16. Mr Crivell of counsel accepts that applicants are not entitled to reargue those matters or have two bites of the cherry. By this application, however, the applicant, Mr Kole-Emmanuel, is seeking to have three or more bites of the cherry.
17. He first of all has sought to get an adjournment to the enforcement proceedings on 9 October 2009 to apply for the certificate of inadequacy prior to the position of the 3 year default sentence.
18. Secondly, there was, as I have said, a failed application before Coulson J for a certificate of inadequacy, 27 May 2010. This is therefore the third occasion on which the applicant seeks to obtain a certificate of inadequacy.
19. The proper analysis of this case and this application is as follows: The applicant is trying, in reality, to use the bankruptcy proceedings as effectively a proxy for determining whether or not there is sufficient evidence before the court to discharge for the applicant to be able to discharge the burden of proof which lies squarely upon him.
20. In my judgment, this is impermissible. It is incumbent upon applicants seeking certificates for inadequacy to come before the courts with adequate evidence such as to discharge their burden of proof. It is not sufficient simply to come before the court waving a two page official receiver's report which fails in any way to begin to explain what has in fact changed since the order of the confiscation to render the realisable assets to a value of nil, or thereabouts. Still less is it satisfactory to wave such an official receiver's report in the face of very clear evidence, since Day 1, that the applicant had very substantial hidden assets which were and have remained unexplained.
21. For those reasons, in my judgment, it would be quite unjust and inappropriate to accede to any application to adjourn the matter. The application must be dealt with on its merits today. There are no merits in the application. There is no real evidence adduced by the Applicant to discharge the burden of proof on him. Accordingly, for the reasons I have given the application for the certificate of inadequacy is dismissed.
22. MR DAVIS: My Lord, thank you. It would normally be my application for costs at this stage but in view of the bankruptcy order, it may be that such an application is not going to take us very far.
23. I do not, I am afraid, have a schedule of costs in any event. Might I suggest that your Lordship make an order similar to that made by Coulson J?
24. MR JUSTICE HADDON-CAVE: Yes.
25. MR DAVIS: Could we have 7 days to serve a summary bill of costs?
26. MR JUSTICE HADDON-CAVE: Yes.
27. MR DAVIS: If not agreed, to be assessed.
28. MR JUSTICE HADDON-CAVE: Any objections, Mr Crivell?
29. MR CRIVELL: No observations, thank you.

MR JUSTICE HADDON-CAVE: I order that the cost of the application is to be paid by the application to the respondent via the said summary bill of costs within 7 days.