P, Re [2008] EWHC 3245 (Admin)

Case No CJA/20/2004[2008] EWHC 3245 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Tuesday, 21 October 2008
Strand
London WC2A 2LL
B e f o r e:
MR C M G OCKELTON
(Sitting as a Deputy High Court Judge)
RE: P
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
Between
RE: PClaimantComputer-Aided Transcript of the Stenograph Notes ofClaimantWordWave International LimitedClaimantA Merrill Communications CompanyClaimant190 Fleet Street London EC4A 2AGClaimantTel No: 020 7404 1400 Fax No: 020 7831 8838Claimant(Official Shorthand Writers to the Court)ClaimantMr Rupert Jones (instructed by RCPO) appeared for ClaimantMr Simon Perhar (instructed by Avetoom & Co) appeared for Defendant
J U D G M E N T
[1]THE DEPUTY JUDGE: This is an application for the appointment of a management receiver under section 77 of the Criminal Justice Act 1988 in respect of certain property of Mr SMP, the defendant to these proceedings. The application arises out of Mr P's conviction on his own plea and a subsequent order, a restraint order by Hooper J. That order relates to property in general identified as being realisable property for the purposes of it and arises further from the judgment of the criminal court following a ruling by HHJ Williams on 30 November 2007. The property in respect of which the claimant now seeks the appointment of a management receiver relates to certain chattels (to which I shall return in due course) and, more crucially and as a matter of greater dispute, 2A Belgrade Road, premises in Stoke Newington.[2]In making her ruling in the confiscation proceedings the learned judge considered the evidence relating to that property. She gave in some detail her reasons for supposing that the defendant, Mr P, was to be regarded as having an interest in it. Those reasons derived from her examination of a history of the property's passing from a previous owner to a Mr Lamb during the course of the negotiations for which the purchase had been projected by Mr P and subsequently by a company of which Mr Lamb was director, but in respect of which he appeared to have some facility for direction. I put it in that way because the correspondence which the judge saw and which I have seen indicates that the company was treated, for the purposes of correspondence, as Mr P's company, but in the end both the contract and the conveyance were in the name of Mr Lamb.[3]Mr Lamb of course was not a party to the confiscation proceedings. As has been pointed out, his first opportunity to deal with matters formally before a court is today. Represented by Mr Perhar, he claims today that the property at 2A Belgrade Road is entirely his and that Mr P has no interest in it. He therefore submits, as an interested party in these proceedings, that no appointment of a management receiver should be made in respect of it. And of course it has to be said that if the true position is that Mr Lamb is the sole legal and beneficial owner of 2A Belgrade Road, and not as the result of any tainted or otherwise disallowable gift, then it must be right to say that this court should not make the order sought in respect of Mr Lamb's property.[4]I will deal first with an issue raised at the last possible minute by Mr Perhar; that is to say that the application, as he puts it, does not get off the ground because it is misconceived. He put that point in one way in writing and under, it is fair to say, some pressure, a completely different way orally.[5]In writing he submitted that because the original restraint order does not specifically mention 2A Belgrade Road, 2A Belgrade Road cannot properly be the subject of an order under section 77(8). That submission, however, he withdrew when subsection 77(3 (which makes it clear that a restraint order may be in general terms) was pointed out to him. He then argued that nevertheless a restraint order can only be made in respect of the defendant's realisable property. That is implicit in section 77(1). Realisable property is then defined in section 74(1) and section 102(5). Section 74(1) reads as follows:
"In this part of this Act realisable property means, subject to subsection (2) below [which does not apply in this case] (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."
Section 102(7) says this:
"Property is held by any person if he holds any interest in it."
[6]Mr Perhar argues that the position of Mr Lamb has always been that he is the sole legal and beneficial owner of 2A Belgrade Road. He suggests that if that is the case the restraint order cannot be regarded as applying to 2A Belgrade Road because it is not realisable property; it would only be realisable property if either the defendant held the property, including having any interest in it, or if he had directly or indirectly made a gift caught by the Act.[7]Mr Jones' response to that submission was that for the purposes of these proceedings the property should be regarded as realisable property. He reminded me of the history of the proceedings and pointed out that the judge had made a clear finding that 2A Belgrade Road formed part of the property of the defendant to the proceedings before her.[8]It seems to me that the claimant in these proceedings does have the task of showing that the property is realisable property within the meaning of section 74 assisted, if necessary, by section 102(7). But I am satisfied that the claimant has done what is necessary in the context of this case.[9]The position is that the trial judge made a finding as to the issue. There is an appeal to the Court of Appeal Criminal Division against the confiscation order and I am told that one of the grounds is that the judge erred in treating 2A Belgrade Road as part of the defendant's property. The grounds are unspecific but it is clear that permission was given to argue that ground, as well as all the other grounds. Nevertheless, for the moment the judge's finding is the last full judicial treatment of the ownership of that property.[10]In the course of attempting to recover property under the confiscation order, the claimant has addressed various communications to Mr Lamb. The first act to which I need refer is that in February 2008 the claimant registered a restriction on the register so that no disposition of 2A Belgrade Road could be made without the claimant's consent. I have not heard that Mr Lamb raised any objection at any stage to the making of that entry or raised any question as to why it had been made and on whose authority.[11]More recently, in the summer of this year, the claimant wrote to Mr Lamb in relation to this property, seeking answers to a series of questions which would have enabled the claimant to know whether in truth 2A Belgrade Road was to be regarded firstly, as property in which it was properly interested; and secondly, property which needed any particular steps taken in respect of it. There was no reply to that letter. There was no reply when it was first sent to the defendant Mr P, and there was no reply when it was renewed to Mr Lamb.[12]Mr P has taken no active interest in these proceedings other than to indicate that he does not object to the appointment of the receiver as proposed.[13]It is almost right to say that Mr Lamb has taken no interest in these in proceedings either, because he left it until the last possible minute before making any submissions at all. I am told that it was late yesterday that submissions were made in the form of a witness statement from Mr Lamb and in certain documents attached to it, and Mr Perhar's skeleton argument emerged only this morning.[14]In Mr Lamb's witness statement he asserts that he is registered as the sole proprietor of 2A Belgrade Road, subject to a charge in favour of a building society. He says he is solely, legally and beneficially entitled to the property and that Mr P has no interest in the property whatsoever. He refers to a Land Registry entry.[15]That, I think it is right to say, is the sum total of the material from Mr Lamb which could assist any determination as to the legal or beneficial ownership of 2A Belgrade Road. In those circumstances, it seems to me that, insofar as it is an issue in these proceedings, the claimant has established that the property at 2A Belgrade Road is property held by the defendant; that is to say, Mr P has some interest in it. That is as found by the trial judge, and that is not shown to be a wrong finding in these proceedings.[16]So I reject Mr Perhar's primary submission which is that these proceedings, insofar as they are an application under section 77, are misconceived. If then a receiver can be appointed, the question is: should a receiver be appointed?[17]The Act has at section 82 the general principle that the purpose of appointing a receiver should be so that the receiver can exercise his powers, "with a view to allowing any person or recipient of any such gift to retain or recover the value of any property held by him." So it is clear that if a receiver is appointed any interest that Mr Lamb has in the property is protected.[18]The general rules to the exercise of the powers by a receiver are in section 82(2):
"The power should 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."
The general test for appointing a receiver is whether such appointment would be just and convenient.[19]The claimant's argument is as follows. The property is realisable property. If it is to be realised its value needs to be maintained. There is material that might lead a court to suppose that its value is at present declining. In particular, it is said that the property is at present occupied by squatters, and it is also said that questions as to the insurance of the property have not been satisfactorily answered.[20]Mr Perhar points to two things in response. First, Mr Lamb's witness statement, to which I have already referred, asserts, although without any supporting documentation, that the property is insured, and also indicates that proceedings have been taken for the repossession of the property from the squatters: and I am asked by Mr Perhar to assume that those proceedings would not have been taken by a person who was not attempting to maintain the value of the property. And I think Mr Perhar was asking me to take judicial notice of the procedure by which the Shoreditch County Court operates its bailiff service.[21]I regard the evidence adduced on behalf of Mr Lamb as essentially insubstantial. Nothing would have been easier than to exhibit the note of insurance if he had chosen to do so. Nothing would have been easier than to indicate precisely the position that the possession action was at as at last night when the documents were served if he had chosen to do so.[22]But in fact it does not seem to me that the proof by the claimant of any actual deterioration in the value of the property is necessary for the claimant to succeed in the application the claimant makes. What is clear from the documents and the history to date is that any possible deterioration in the value of the property is highly unlikely to be resolved by correspondence between the claimant and Mr Lamb and action taken by Mr Lamb on that correspondence.[23]If, therefore, there is valuable property which is realisable for the purposes of the order and in due course capable of satisfying the defendant's liability, then the position must be that a danger to its value is one which may properly be met conveniently and justly by the appointment of a receiver. It may be that, as has been said, there are squatters there now: those squatters may be ejected; there may be further squatters; there may not be; it may be that the property is currently insured or it may not. One purpose of the appointment of a management receiver is to protect the value of the property against future risk.[24]For those reasons I would regard it as in principle convenient to appoint a management receiver in the circumstances of this case. I emphasise that my view might have been different if it had not been for the lack of material emerging from Mr Lamb and the lateness with which the material that I do have has been submitted. The reason why I say it might have been different is that if it were the case that the property in question was clearly being managed with a view to retaining its value, or if it were the case that any problems about it being raised by the claimant were being and had been adequately dealt with by Mr Lamb, I doubt whether the present application would have been made or if made would have been successful. But that is a very long way from the position on the evidence I have seen.[25]The truth of the matter is that unless an order of this nature is made the claimant and those, stretching as far as the interest of the whole public, whom the claimant represents could have no confidence at all that the value of this property could be maintained.[26]The third point raised by Mr Perhar relates to costs of a receiver. Mr Perhar says that the costs capped initially as they are at a particular sum and with an indemnity of another obviously smaller sum, are unrealistically low. He did not put it like that but this is what he meant. He meant that he suspected that the costs would rise beyond the initial cap if a management receiver was appointed and if the management receiver had to make all the investigations and carry out all the duties which Mr Jones envisaged that he would have to do.[27]I think it is right to say that those submissions were submissions which, even in the way that he did make them, were not easy for Mr Perhar to make. The reason for that is, as Mr Jones has pointed out, that if in fact the property is being properly managed; if the squatters, if any, are indeed being ejected with a view to securing lawful tenants at a proper rent; then the management receiver will, if appointed, have very little to do, and even management receivers when they do very little cost very little. If the costs of the management receiver are indeed high, that will necessarily be because the management receiver has had a lot to do, and that of course would be because if Mr Perhar's submissions about Mr Lamb's treatment of the property are not in fact correct.[28]Nothing that has been said to me today causes me to suspect that the management receiver proposed is unduly expensive or that he will do work which is unnecessary in the light of the work which he is asked to do. I therefore regard the submissions Mr Perhar made as to the cost of an appointment as being without substance. The formal way of stating that is perhaps this: although it is possible that if a management receiver has to do a lot of work it will be expensive, nothing persuades me that any expense will be disproportionate to the amount of work which needs to be done in relation to this property.[29]Those are the issues which were raised in respect of the appointment of a management receiver for 2A Belgrade Road. There was no objection of any sort to the identity of the receiver proposed or any other procedural issues, and I shall therefore order the appointment of a management receiver in respect of 2A Belgrade Road.[30]So far as concerns the chattels, Mr Lamb has no interest in them and Mr Perhar has not made any submissions about them for that reason. Mr P, the defendant to these proceedings, raises no objection to the appointment of a management receiver in respect of the chattels and I shall therefore order that a management receiver be appointed for them.[31]I had better hear any further submissions on the form of the order. Or it may be that you want to go away and think about it. If it helps, Mr Jones, I think Mr Perhar's expressed caution about the power to charge may well have been because of the terms in which the application was made and the reasons for which it was made. A power to charge may also perhaps be more than you really need. But on other hand you might want to charge the chattels.[32]MR JONES: Exactly. I was hoping to suggest that when I put forward the concession on "there is no powers of sale" that that be limited to 2A Belgrade Road in the circumstances where there of course is issue yet to be taken. But he has full powers over the chattels.[33]THE DEPUTY JUDGE: Yes, but you don't want to mortgage Belgrade Road either, do you?[34]MR JONES: No, my Lord.[35]THE DEPUTY JUDGE: The purpose of this is to make sure --[36]MR JONES: So powers of charge and sale over 2A Belgrade Road could be restricted, but no sale or charge of 2A Belgrade Road without further order of the court.[37]THE DEPUTY JUDGE: No sale or charge.[38]MR JONES: No sale or charge of 2A Belgrade Road specifically without further order of the court.[39]MR PERHAR: My problem with that is it implies that the court has addressed its mind to that point and "without further order from the court" simply left as "no sale or charge of 2A Belgrade Road" would be more acceptable.[40]MR JONES: My Lord, what we would say about that is that one cannot anticipate the circumstances in which one finds oneself. If there is an issue whereby the receiver comes into this property with diminishing value to such an extent that in my view to satisfy the legislative steer it need to be sold, then of course we would provide that he has the power to return to court and say: I seek a direction on notice to Mr Lamb, which he can argue, as to his beneficial interest and the like but that he not be excluded from the potential to come back to court and ask for the power of sale, if necessary, on full notice of course to Mr Lamb with his opportunity to reject that.[41]THE DEPUTY JUDGE: Well he doesn't need the power of sale in this order to do that, because he can always seek directions from the court.[42]MR JONES: My Lord of course he could seek a further direction from the court on a further day.[43]THE DEPUTY JUDGE: There are still one or two problems about the drafting of this order, which is why I cut you off when I did. You see, there is paragraph 5 which we haven't looked at yet.[44]MR JONES: The same will --[45]THE DEPUTY JUDGE: Yes, well will it? I mean that was obviously in standard form for some reason. I think it probably can go, can't it?[46]MR JONES: My Lord, again yes. One can delete the words "includes, but" and "not"; so one has "The defendant's assets is limited to the assets..."[47]Again that deals with the same point as 9.[48]THE DEPUTY JUDGE: Yes.[49]MR PERHAR: Of course if the 1(e) and (f) --[50]THE DEPUTY JUDGE: 1(e) and (f) you referred to earlier, Mr Perhar, didn't you?[51]MR PERHAR: Well (e) and (f) can of course be subject to a provision "There be no power of sale or charge over 2A Belgrade Road without ..." -- that can be referred to --[52]THE DEPUTY JUDGE: I would be inclined -- and let me know if you want a decision on this from me -- to order that the whole of paragraph 1 be subject to a provision that this order does not give the appointee power of sale or charge over 2A Belgrade Road.[53]MR JONES: My Lord that's what I envisaged in -- I know Mr Perhar -- only difference between us is "without further order of the court." I don't whether it is their explicit --[54]THE DEPUTY JUDGE: My preference would be that the powers of charging and selling 2A Belgrade Road be not included in this order at all, and that if the receiver finds himself in a position where he needs to make application for that to be done it is done then as a new application to the court, which it will be quite clear is raising new issues, rather than simply piggy-backing on an order which appears to have been made with it in mind.[55]MR JONES: My Lord I am happy, then, in light of that indication simply to say that "There be no power of sale or charge over 2A Belgrade Road" in the order. And if the circumstances ever arise then the receiver would have to come back to court and seek such a variation.[56]THE DEPUTY JUDGE: Yes. Well, Mr Perhar, that leaves you with this, broadly speaking, doesn't it? That there is a draft order which, so far as paragraph 1 is concerned, Mr Jones will arrange for the insertion, presumably, between paragraphs 1 and 2 of a new paragraph saying "This order gives no power of sale or charge over 2A Belgrade Road", and at the beginning of paragraph 1 say "subject to paragraph 2." It renumbers everything that follows and in addition deletes from 5 the words "includes, but" and "not", so that it is limited. In paragraph what is now 9 but will be 10, after "Criminal Justice Act 1988" delete "including but not" with the same effect that it is limited. And in the schedule delete -- this is your request -- the word "defendants" in the title to the list.[57]MR PERHAR: Yes.[58]THE DEPUTY JUDGE: Now if you are both happy with that I need make no further ruling on it. I just leave you to draw something up.[59]MR PERHAR: Does there need to be an inclusion and (inaudible) in relation to limitation in costs of the management receiver being indicated?[60]MR JONES: My Lord, in my submission the limitations are set out in the letter of agreement which is specifically referenced at new paragraph 4, old paragraph 3, "costs of the receivership remuneration should be made ...(Reading to the words)... agreement."[61]The letter of agreement sets out restrictions and sets out the reference to CPR 64, assessment and the like.[62]THE DEPUTY JUDGE: And I think it's right to say that my jurisdiction in relation to the costs of the receivership is really quite limited.[63]MR JONES: My Lord that will come back to court if necessary under Part 69.[64]THE DEPUTY JUDGE: Yes. Very well, an order will be drawn up in due course.[65]MR JONES: My Lord, there is an application for costs in this matter. We say that this is a clear case of costs following the event -- I don't have a schedule -- and we would ask that it be subject to detailed assessment if not agreed. We say that this was an issue which was contested. For the reasons given in your Lordship's judgment the (inaudible) applied for by the applicant, and in principle there is nothing that would detract from the usual principle that costs follow the event, particularly in light of the interested party's previous conduct.[66]MR PERHAR: Your Lordship, in response to an application I would make the following submission. I have not had any schedule of costs served on me as one would expect for an application of this nature. As far as principle of costs is concerned, whilst I accept that the evidence on behalf of Mr Lamb was produced late, I would submit that a large part of these proceedings have been taken up this morning in relation to the evidence that was given at the Crown Court and the decision that was made at the Crown Court by the learned judge on that occasion.[67]In terms of the application as it concerns you today for the appointment of a management receiver, I would submit that the application actually expanded on that application in an attempt to bring in the court to make a decision on whether a declaration should be granted or not; and a skeleton argument produced by my learned friend certainly deals in great detail with that side of the application, and it certainly seems as though a great deal of work went into that part of the application that was made before you today.[68]So whilst I don't think I can properly oppose the issue of costs, certainly I do oppose costs being awarded wholly for the applicant in this application, given the manner in which it was brought today. It was only listed for one hour and I would submit that the application in relation to the appointment of a management receiver, if the application be confined to simply that, we would not have needed --[69]THE DEPUTY JUDGE: What guidance do you say Mr Jones and those instructing him had on what issues they should cover?[70]MR PERHAR: Your Lordship, certainly not issues in relation to seeking a declaration from the court in this manner in a one hour -- or even if it was a two-and-a-half hour application -- in relation to the true ownership of property. That was never going to be, even if we had spent two or three days hearing evidence in relation to who should correctly own this property, we would still probably then have one or two days of submissions after that about the correct interpretation of the way in which the court should determine that beneficial interest.[71]So what I would submit is that at least 50 per cent of the efforts that were put in to this application were directed in the wrong direction which was towards seeking the court to make a declaration of beneficial interest in favour of Mr P when that was clearly ill-conceived.[72]So whilst I don't think I could properly oppose the whole issue of costs, certainly I would seek the court -- I know the court doesn't like to make costs an issue-by-issue basis and costs do normally follow the event, but in these circumstances I would certainly invite you to exercise your discretion to say that in these circumstances costs should be limited to, I would submit, 50 per cent or less.[73]THE DEPUTY JUDGE: Mr Jones, I don't need to seek your reply. The normal rule is that costs follow the event and Mr Jones has made an application for all his reasonable costs on that basis. Mr Perhar suggests that the conduct of the case by Mr Jones raised issues which did not need to be raised and which he should not have raised and therefore should not receive his costs for doing so.[74]The position is that the possibility of these proceedings was raised some time ago and the claimant's query about the ownership of 2A Belgrade Road was also raised some time ago. Mr Jones had in the circumstances to present his case in a number of alternative ways. It does not seem to me that at any rate canvassing the possibility of simply proving the ownership of 2A Belgrade Road was an inadmissible way of doing that.[75]The interested party on the other hand provided no assistance to the claimant at any stage until very late yesterday in order to enable the claimant to restrict his submissions in any way. It therefore seems to me that it would be quite wrong to disallow the claimant's costs on an issue-by-issue or any other basis. The submissions made both orally and in writing on behalf of the claimant were made concisely and none of them is a submission which, in my view, ought not to have been made in the circumstances of this case. There will therefore be an order for the interested party to pay the claimant's costs on the standard basis if not agreed.[76]MR PERHAR: Your Lordship, I am afraid I have one further application. There is an application for permission to appeal. That application was based on the decision by your Lordship that in relation to realisable property the application that was made by the applicant in this case was correctly made and was made in accordance with the narrow definition of realisable property, as provided within section 74(1) of the Criminal Justice Act 1988 and that definition results from the application being based upon section 77 of the Criminal Justice Act 1988 and being the sole basis for the application before this court.[77]The application is based on the fact that the court there erred by saying that the definition within 74(1) is one that applies to the circumstances of this case when realisable property is clearly set out within the definition and a definition that doesn't apply when one looks at the facts here.[78]THE DEPUTY JUDGE: Permission to appeal is refused. The arguments raised by Mr Perhar on that basis depends, in essence, on the evaluation I made of the evidence relating to the question of whether the property was realisable property within the meaning of section 77. Nothing that Mr Perhar has said to me indicates any arguable error of law in the treatment of that issue.