P, Re [2010] EWHC 3740 (Admin)

Case No DTA/23/2005[2010] EWHC 3740 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Thursday, 18th December 2009
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE PITCHFORD
RE: P
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
Between
RE: PApplicantComputer-Aided Transcript of the Stenograph Notes ofApplicantWordWave International LimitedApplicantA Merrill Communications CompanyApplicant165 Fleet Street London EC4A 2DYApplicantTel No: 020 7404 1400 Fax No: 020 7831 8838Applicant(Official Shorthand Writers to the Court)ApplicantMr J Dennison (instructed by CPS) appeared for ApplicantMr O Pownall QC (instructed by Creed Lane Law Group) appeared for RespondentMr Kelly appeared for Intervener
J U D G M E N T
[1]MR JUSTICE PITCHFORD: What I am going to do is dictate the order that I propose to make and then give my reasons: Upon hearing counsel for the applicant, the respondent and the intervener, Mr Gerrard Peacock, it is ordered that 1. A receiver is appointed in the terms of the draft order commencing at page 248 of the hearing bundle, save for the deletion of paragraphs (b) at page 249, and paragraph 2 at page 256. 2. The receiver shall not without leave of the court, take any step to enforce a sale of the properties listed in the order, before Monday 22nd February 2010. I shall make a declaration that the respondent has a 50 per cent beneficial interest in each of the six properties listed in the order, and had a 50 per cent interest in the property at 6 Virgina Garden, Great Sankey, Warrington.[2]A summary of the history of this matter is as follows. On 8th January 1997 the respondent, together with a co-accused, pleaded guilty to five counts of conspiracy to supply controlled drugs and was sentenced to 12 years' imprisonment, later reduced on appeal on 5th October 1998 to 10 years' imprisonment. On 10th July 1997, following a confiscation hearing, the Crown Court identified the benefit received from drug trafficking in the sum of £273,717.50, in respect of each of the two co-accused. The respondent's realisable assets were certified as £823 and the confiscation order was made in that sum.[3]In early 2005 the prosecutor discovered that the respondent was associated with an address in Spain and appeared to be the owner or part owner of a number of properties in Warrington and Preston. In anticipation of an application for an order under section 16(2) of the Drug Trafficking Act 1994, the prosecution applied for and obtained on 18th March 2005, a restraining order. That restraining order is still in effect. Section 16(4) empowers the prosecutor, upon the issue of a certificate of increase, to apply to the Crown Court for an increase in the sum to be recovered under the confiscation order. The prosecutor obtained a certificate and made an application to the Preston Crown Court for a re-evaluation of realisable assets. A substantial hearing took place, firstly, over a week in May and ended on the 10th and 11th September 2007. On 11th September 2007 the respondent's realisable assets were certified by His Honour Judge Slinger in the sum of £237,717.50 but that was a typing error which was corrected on 14th November, to £273,717.50. Both the respondent and his co-accused, Michael Gillett, appealed to the Court of Appeal (Criminal Division) against the order made by Judge Slinger and the points then taken on the respondent's behalf were, first, that a sum of £100,000, the judge had found was owed to him by a man called Scott should not have been treated as a realisable asset; secondly, that one of the properties should not have been treated as a partnership asset held jointly by the respondent with his father, Gerrard, but should have been treated as the sole property of Gerrard; thirdly, the sum of £29,000 should have been treated as a loan.[4]Authorities relevant to the issue of property acquired after the original confiscation order was made were cited to His Honour Judge Slinger in the Crown Court. It would appear that counsel acting on his behalf, understandably, took the view that the matter was settled. Accordingly the only argument addressed to Judge Slinger, under section 16, concerned the exercise of the discretion under section 16(4). The point was also taken before the judge that an unreasonable time had elapsed since the commencement of the confiscation proceedings, and accordingly that enforcement should not take place in view of the breach of Article 6. The judge was also asked in the exercise of his discretion to examine the respondent's attempt to live a law abiding and productive life since his release from prison.[5]On 2nd April 2009 the Court of Appeal (Criminal Division) dismissed the appeal because Judge Slinger's conclusion on the first two points raised on the respondent's behalf was upheld and, although the Court of Appeal accepted that the judge should have treated the sum of £29,000 as a loan, it made no difference to the ultimate figure for realisable assets since at that time the realisable assets of the respondent exceeded £319,000.[6]Of relevance to the current application for appointment of a receiver is the view which Judge Slinger had formed of the two co-accused, during the further hearing before him, which led to the increase in the sum of realisable assets. He said at page 43 of his judgment, referred to by Slade J in the Court of Appeal at paragraph 18 of her judgment:
"I have, as I must, considered the case of each separately. In fact the same considerations apply to both men. I am entirely satisfied that they have lied to the Court, and have [set] out quite deliberately to deceive the Court and others as to the truth as to their financial affairs and assets."
[7]Of further relevance to the current application for a declaration as to the respondent's interest in the identified properties is the finding of Judge Slinger that they were held in a 50 per cent partnership between the respondent and his father. As I have already noted, the respondent maintained before Judge Slinger that one of these properties in which his father was living, belonged to the father and, despite the fact that the registered title was in the respondent's name solely, the respondent had no beneficial interest in it.[8]The submission now advanced to me on behalf of Mr Gerrard Peacock was advanced to Judge Slinger on behalf of Mr Mark Peacock at the increased confiscation hearing. Mark Peacock gave evidence and submitted in evidence the witness statement of his father in support of his case. As I have indicated, the Crown Court judge rejected the case then advanced.[9]The respondent originally intended to argue, first, that the court has no jurisdiction over after required property, and secondly, that the enforcement proceedings had not been completed within a reasonable time in accordance with the obligations of the state under Article 6.[10]The respondent is now represented by Mr Pownall QC who has confined his submissions today to the single question whether or not a receiver should be appointed in the light of what he submits is a good argument, that the court did indeed enjoy no jurisdiction over this property, since it was acquired after the date of the original confiscation order. It is not therefore necessary for me to consider any submission made in writing under Article 6.[11]The question whether section 16(2) of the 1994 Act contemplates a jurisdiction over after acquired assets, requires me to begin with the judgment of the Court of Appeal delivered by Rose LJ in R v Tivnan [1999] 1 Cr App R(S) 92, in which the appellant sought to appeal the issue of a certificate of increase under the identical section 16 of the Criminal Justice (International Corporation) Act 1986, the predecessor of the Drug Trafficking Act 1994. The court held that it had no power to act. The appeal from the single judge who gave the certificate should have been to the Court of Appeal (Civil Division). Here, as in Tivnan, the respondent is attempting to challenge the order made by Judge Slinger in the Crown Court at Preston, namely, the increased sum of realisable assets and therefore the increased confiscation order.[12]In a fully reasoned judgment, the court held in Tivnan that the provisions of section 16 of the 1986 Act applied to assets whenever required. It is unnecessary for me to examine the court's reasoning because, as Mr Pownall realistically recognises, either I am strictly bound by it or, it is of such persuasive authority upon the identical words leading to construction of the meaning of section 16 of the 1994 that I am in practice bound by it.[13]What Mr Pownall seeks from the court is the exercise of a discretion not to appoint a receiver, since there is an argument which although he cannot pursue before me, the respondent will wish to pursue before the Court of Appeal (Criminal Division) in a second application for leave to appeal out of time.[14]As to the exercise of that discretion, Mr Pownall seeks to demonstrate by the use of a schedule that the current realisable value of the properties set out in the draft order mean, in effect, that very little if anything would be acquired to be set against the confiscation order, once the costs of the sales had been deducted from those sums. I enquired in the course of argument as to what proposals there were. There is, in effect, no proposal, save Mr Pownall's suggestion that perhaps I could on condition that £20,000 was paid within a certain period of time order that a receiver would not be appointed.[15]Mr Kelly, who appears for the intervener, repeated to me the account which the respondent, Mark Peacock, gave to Judge Slinger in the Crown Court, which caused him to submit that I should not make a declaration that the property at 55 Geoffrey Street in Preston was held in the joint ownership both of his client and his son. There was presented to me no additional evidence upon which I could form a judgment, simply the assertion which had already been rejected. I take the view, as to the making of the declaration, that the evidence before Judge Slinger was overwhelming and that it was inevitable that upon an application to the High Court, for the appointment of a receiver, a declaration would be made, in the absence of any further material upon which the court could be expected to act.[16]As to the principle of the appointment of a receiver, in the absence of any realistic proposals from the respondent, I pose the question rhetorically: what is the court supposed to do? If nothing, how long does it have to wait before the property which is part owned by the respondent is of such a value that it would be profitable to enforce a sale of these properties. The court reminds itself that, throughout, the reasonable time period which has already formed part of the submissions made to the Crown Court has been running. Secondly, the policy of the legislation, which requires that those who have benefited from their criminal acts in trafficking in drugs, should be required to disgorge that benefit whether from property held directly as a result of drug trafficking, or from property which may have been acquired from other sources.[17]Mr Pownall has drawn to my attention two decisions of the House of Lords in which the issue, whether these provisions apply to after required assets, have each come to the conclusion that it is an issue which should be considered on a future occasion. The first of these decisions is in Re: Maye (AP) Northern Ireland [2007] UKHL 9, and the second decision of the House of Lords in May [2008] UKHL 28. In the first of those decisions, in a speech delivered by Lord Scott of Foscote, his Lordship observed that it was unnecessary to reach a conclusion whether the Northern Ireland legislation applied in equivalent circumstances to after acquired property. The reason was that the House of Lords were able to rule that the defendant's interest in that property accrued before the expiration of the confiscation proceedings. At paragraph 24 of his speech he concluded:
"For the reasons I have given your Lordships can decide both the issues that arise on this appeal without addressing the question whether the confiscation scheme established by the 1996 Order does or does not permit an increase in the realisable amount judged to be obtainable from a defendant’s assets, and thus an increase in the amount that a confiscation order can order the defendant to pay, to be based on the value of assets not acquired by the defendant until after the confiscation order was made. This question is both important and difficult and should, in my opinion, be left to be addressed in a case where, on the facts of the case, it needs to be answered."
An observation to similar effect by Lord Bingham was made in the case of May.[18]Mr Dennison submits on behalf of the applicant that the respondent has had ample time to seek leave to raise this issue by way of further appeal to the Court of Appeal (Criminal Division) and I agree. It was on reflection inevitable or almost inevitable that the judge sitting in my position would hold himself or herself to be bound by Tivnan. Nevertheless, I think there is sufficient merit in the submission made by Mr Pownall, not to undermine the principle that a receiver should be appointed in circumstances such as this, but sufficient to enable me to order that the respondent shall have sufficient time to make his application for an expedited consideration of an application for permission to the Court of Appeal. If that application is made and finds favour then a further application can be made either to the Court of Appeal or to a judge of the High Court, for the purpose of extending the period for which I have ordered the powers of the receiver should be suspended.[19]But I have set a relatively short period because I do take the view that expedition is required, not only by the respondent and his advisers but also by way of application to the Court of Appeal (Criminal Division) for an early consideration of that application.[20]For those reasons I have made the order to which I referred at the outset of this judgment.[21]MR DENNISON: May I just raise two points? I think the first one is non contentious. My Lord's third part of your declaration, the respondent has 50 per cent in each of the six properties and had a 50 per cent interest in 6 Virginia. I think it is common ground that there was a typographical error in the order which is where one was led astray. Virgina Gardens was 100 per cent Mark Peacock. You might want to make the declaration in those terms.[22]MR JUSTICE PITCHFORD: I will. Will you assist to draw up the order, Mr Dennison, and make sure that is right.[23]MR DENNISON: My Lord, certainly. Second the issue as to costs. Can I hand up a schedule and for my learned friends (Same Handed). My Lord will see it is headed for Mark Peacock alone. It does include the time liaising and with those representing Gerrard Peacock. It is split, the set split from those who sit behind me is 40 per cent Mark Peacock, time spent and 60 per cent Gerrard Peacock time spent, which would lead to figures of 260722, Mark Peacock, and 391084 for Gerrard Peacock.

MR JUSTICE PITCHFORD: The other way round?

[25]MR DENNISON: No.[26]MR POWNALL: Can I assist?

MR JUSTICE PITCHFORD: 40 per cent Gerrard, 60 per cent Mark I think you said.

[28]MR DENNISON: If I did not say, what I meant to say is 40 per cent Mark, 60 per cent Gerrard.

MR JUSTICE PITCHFORD: I see.

[30]MR DENNISON: 40 per cent mark, 2607.22 to 6 per cent Gerrard 310984.

MR JUSTICE PITCHFORD: That is for preparation, is it not?

[32]MR DENNISON: Yes.[33]MR JUSTICE PITCHFORD: That is the time which those instructing you reckon was their apportionment of time. It does not necessarily represent the weight of the argument, does it?[34]MR DENNISON: Of course, in July Gerrard Peacock was not present but it was Mark Peacock who wanted the adjournment so Gerrard Peacock could be heard. So it does get tricky as to quite to who should bear the costs. The Crown's costs have now mounted to just over £6,500. We would seek that amount.[35]MR JUSTICE PITCHFORD: At the moment, subject to what I hear from your opponents, if there is to be an order at all, it ought to be around 50 per cent.[36]MR DENNISON: That will be £3,259.03p.

MR JUSTICE PITCHFORD: Right.

[38]MR DENNISON: We would of course incorporate within the order, so that will be suspended on the same terms.[39]MR POWNALL: My Lord, the reality is that Mark Peacock acknowledges in his position that if there is to be an order of costs, which is to be suspended that he, despite being legally aided and despite his current precarious financial circumstances, should be the individual who bears that cost. The figure remains the same. So it is a matter entirely for my Lord.[40]MR JUSTICE PITCHFORD: Thank you. Mr Kelly?[41]MR KELLY: Very briefly so far as the position on Gerrard is concerned, subsection (8) of section 29 giving the right to the intervener's submissions does read with the court "shall not in respect of any property exercise the powers as conferred by the foregoing sections unless a reasonable opportunity has been given for the person holding in the property to make representations to the court." Of course what we have done is take that opportunity clearly the part we have ruled against, and we also adopted the submissions concerning after required assets. Your Lordship has made the comments in that regard. We are surprised apportionment is 60 per cent against us and 40 per cent against Mark, bearing in mind our submissions were made at 6 o'clock last night, but there we go.[42]MR JUSTICE PITCHFORD: There has, in my view, been a community of effort here, for quite understandable reasons and while it may be that the preparation time for those instructing counsel for the applicant may be disproportionately in favour of Gerrard rather than Mark, the reality of the situation is that they have adopted a joint front. Accordingly I take the view that there should be an order for costs against the losing parties in the sum of £6,518.07 but that will be apportioned 50/50 between each of them, that is to say, the respondent and the intervener, £3,259 each.[43]MR POWNALL: Might I mention one matter, it does not in any way seek to detract from the careful ruling that you have just delivered. It is simply this. In considering the way forward, clearly the respondent might wish to contemplate seeking to make application for leave out of time in respect of the order made by Mitting J. I appreciate that if such an application is sought it must be done within the time frame that my Lord has indicated.

MR JUSTICE PITCHFORD: That would be for the Court of Appeal (Civil Division).

[45]MR POWNALL: Indeed. The order you have made does not preclude the avenues that he seeks to pursue, merely the time within which such pursuit must be undertaken.[46]MR JUSTICE PITCHFORD: That is right, I think Mr Pownall. If you come against this problem later on, it will be the whole judgment they see and not the order I suspect.[47]MR POWNALL: Of course. I am much obliged.

MR JUSTICE PITCHFORD: Thank you.