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URL: http://www.bailii.org/uk/cases/UKHL/2001/34.html
Cite as: [2001] UKHL 34, [2001] 3 All ER 961, [2001] 3 FCR 97, [2001] WLR 1388, [2001] 1 WLR 1388

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Norris, In Re [2001] UKHL 34; [2001] 1 WLR 1388 (28th June, 2001)

HOUSE OF LORDS

Lord Hope of Craighead Lord Browne-Wilkinson Lord Clyde Lord Hutton Lord Hobhouse of Wood-borough

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

IN THE MATTER OF CLIFFORD NORRIS

(RESPONDENT)

AND

IN THE MATTER OF THE DRUG TRAFFICKING

OFFENCES

ACT 1986

AND

IN THE MATTER OF AN APPLICATION BY TERESA

WENDY NORRIS

ON 28 JUNE 2001

[2001] UKHL 34

LORD HOPE OF CRAIGHEAD

My Lords,

    1. I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hobhouse of Woodborough. I agree with it, and for the reasons he gives I would allow the appeal.

    2. The Court of Appeal held that Mrs Norris had a fair opportunity to put her case in the Crown Court where she and her husband were making common cause and she gave evidence. It was on that basis that Tuckey LJ said that it would be an abuse of process for her to relitigate the same issues in the High Court: [2000] 1 WLR 1094, 1101E-F. But, as my noble and learned friend has explained, the proceedings in the Crown Court and those in the High Court are designed to serve different purposes and the interests of Mrs Norris and her husband in the matrimonial home are not the same. Mrs Norris was not a party to the proceedings in the Crown Court, nor did the procedure which the statute lays down require her case that she had a beneficial interest in the property to be put at that stage.

    3. At the stage when the proceedings were in the Crown Court the only question which had to be resolved was the value of the husband's interest in the house. The question for that court was the amount of the defendant's realisable property, as this was the upper limit on the amount of money which he could be ordered to pay under section 1(5) of the Drug Trafficking Offences Act 1986 by that court. It was not the function of the Crown Court to make any order which affected the interests that any third parties might have in the property whose value it took into account when determining the amount of the defendant's realisable property.

    4. The scheme of the Act, so far as third party interests are concerned, is for their claims to be resolved in the High Court. The question for the High Court, when the proceedings reach this stage, relates not to the amount of money which the defendant must pay - that has already been fixed by the order made in the Crown Court - but to the powers which the receiver is to be authorised to exercise. It is at this stage that third parties are entitled to have their claims heard and determined. This is when, as a matter of both substance and procedure, representations may be made as to their interests, if any, in the property which the receiver wishes to realise. This is provided for expressly by section 11(8) of the Act, consistently with which RSC, Ord 115, r 7(4) lays down the procedure by which those holding any interest in the realisable property are to be notified.

    5. Provisions designed to protect the interests of third parties are conspicuously absent from the rules of procedure that apply at the stage of the hearing in the Crown Court. Third parties are not entitled to participate in the criminal proceedings in that court. But the issue for the Crown Court is not whether any property in which a third party might have an interest is to be confiscated. The order which it makes is an order which is directed against the defendant only, and it is simply an order for the payment of a sum of money. The question of realisation, if the exercise of powers by a receiver is needed in order to make good the order which the defendant is required to satisfy, is reserved for the High Court.

    6. I do not therefore, with respect, agree with the observation by Tuckey LJ that the situation which has arisen in this case is exactly that which the doctrine of abuse of process is designed to prevent: [2000] 1 WLR 1094, 1101F. The scheme of the Act itself shows that this proposition must be unsound. It cannot be an abuse of process for a third party holding an interest in property, to whom a right is given by section 11(8) of the Act to make representations to the High Court, to seek to exercise that right just because he or she gave evidence in the Crown Court in support of the defendant's case that the property was not to be valued and taken into account as realisable property. I agree with my noble and learned friend, Lord Hobhouse that there may be other cases where the position which a third party wishes to adopt may be regarded as an abuse of process which should not be allowed to stand in the way of the enforcement of a confiscation order. But, for all the reasons which he has given, that has not been shown to be the position in this case.

LORD BROWNE-WILKINSON

My Lords,

    7. I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hobhouse of Woodborough. For the reasons he gives I, too, would allow the appeal.

LORD CLYDE

My Lords,

    8. I have had the advantage of reading a draft of the speech of my noble and learned friend, Lord Hobhouse of Woodborough. For the reasons he has given, I, too, would allow this appeal.

LORD HUTTON

My Lords,

    9. I have had the advantage of reading a draft of the speech of my noble and learned friend, Lord Hobhouse of Woodborough. I agree with it and for the reasons he has given I, too, would allow this appeal.

LORD HOBHOUSE OF WOODBOROUGH

My Lords

    10. Mrs Norris, the appellant, is the wife of Clifford Norris, a convicted drug trafficker who is presently serving a sentence of 9½ years imprisonment passed upon him by Judge Brown at the Crown Court at Lewes on 24 June 1996. At the same time Judge Brown also made a confiscation order in the sum of £386,397, with 4 years imprisonment consecutive in default, under sections 1 and 6 of the Drug Trafficking Offences Act 1986. In February 1999 an ex parte application was made by HM Customs and Excise, the respondents to this appeal, to Latham J sitting as a judge of the High Court for the appointment of a receiver under s.11 of the Act and other orders. Latham J made the orders asked for on 4 February. One of the orders made was a declaration:

7 Berryfield Close was the house in which Mrs Norris and her three sons lived. They had lived there since she bought it in July 1984. She was registered as having the unencumbered title to the property. The order also required any person having possession of Mr Norris's assets forthwith to deliver up the same to the receiver, subject only to a period of 28 days from the date of the order being allowed before the requirement to deliver up 7 Berryfield Close should take effect.

    11. Mrs Norris had only heard about the ex parte application a few days before as the result of a telephone call from Mr Norris's solicitors. She attended the hearing before Latham J but it is not suggested that she was then in a position to take any part. She was not represented. Following the making of the order, she took legal advice. She swore an affidavit dated 4 March 1999, with accompanying exhibits, and applied for the order to be varied so as to recognise her title or interest in 7 Berryfield Close. Her application was met by the response from the Customs and Excise that it was an abuse of process for her to make any such application the matter having been concluded by the order of Judge Brown. Latham J upheld the objection of the Customs and Excise and dismissed Mrs Norris's application without considering its merits. Her appeal to the Court of Appeal was likewise dismissed [2000] 1 WLR 1094. She has appealed here with your Lordships' leave.

    12. In order to explain the issue which arises on this appeal, it is necessary to refer in greater detail to the scheme of the 1986 Act and the procedural history. To take the statute first, its purpose is stated in the preamble to be "to make provision for the recovery of the proceeds of drug trafficking ...". It was a new Act. Sections 1 to 5 deal with the making of what the Act calls "confiscation orders" (s.1(8)(a)). However, this is a misnomer. The orders are financial orders ordering a defendant convicted of a drug trafficking offence to pay sums of money to the State. Under the 1986 Act the order is to be made at the time of passing sentence and is subject to appeal to the Court of Appeal, Criminal Division, by the defendant as an appeal against sentence. When a defendant has been convicted of a drug trafficking offence, the statute requires the Crown Court, before sentencing him, to determine whether he has benefited from drug trafficking; this question is a general one and not confined to the offence of which he has been convicted. If the Crown Court concludes that he has benefited, it is then required to determine, in accordance with s.4, the amount to be recovered from the defendant and order him to pay that amount. It is this order to pay which is referred to as a "confiscation" order. S.4 requires the Crown Court to undertake a two stage process. First it must assess the value of the defendant's proceeds of drug trafficking: s.4(1). Secondly the court must decide whether the defendant has satisfied it that the amount which might be realised at the time the confiscation order is made is less than the value of the proceeds and, if it is so satisfied, then the order to be made is restricted to the lesser sum: s.4(3). The decision whether the defendant has benefited from drug trafficking and, if he has, the assessment of the value of those proceeds is to be made by the Crown Court making certain assumptions: s.2. These are, broadly, that, unless shown to be incorrect in the defendant's case, any property or money received by the defendant or any expenditure of the defendant, during the period of six years ending with the institution of the criminal proceedings against him represent the proceeds of drug trafficking. The inquiry is therefore a historical one extending back six or more years and requires the drug trafficker to show that there were, over this period, sources other than drug trafficking for his expenditure and acquisition or accumulation of wealth.

    13. The question of the amount that might be realised at the time the confiscation order is made involves a different exercise. It is an exercise to be undertaken as at the date of the making of the confiscation order. By s.5(3), the amount is the value at that time of the realisable property of the defendant together with the value at that time of any gift "caught" by the Act. It thus has to take into account as well property which, maybe, is no longer held by the defendant. "Realisable property" is defined in s.5(1) as meaning any property "held" by the defendant and any property held by a person to whom the defendant has directly or indirectly made a gift caught by the Act. Property is defined so as to have an all embracing meaning and property is "held" by any person if "he holds any interest in it": s.38(7). A gift is "caught" by the Act if it was made by the defendant at any time during the six year period or, if made by him at some other time, if it has been shown to have been, or to represent, the proceeds of drug trafficking: s.5(9). The presumptions in s.2(3) do not apply to s.5. The effect of sections 4 and 5 is that the amount that might be realised at the time the confiscation order is made is to be the market value of the property held by the defendant or donee or, where another also has an interest in that property, the market value of the defendant's or donee's beneficial interest in the relevant property: s.5(4). As stated previously, the burden of proof is upon the defendant to satisfy the Crown Court that this amount is less than the value of the proceeds. If he fails to do so the result is simply that the confiscation order is made in the sum that is equal to the value of the defendant's benefit as assessed, reflecting the presumptions which have been made against him.

    14. All the requirements of sections 1 to 4 are to be performed by the Judge of the Crown Court for the purpose of his discharging his duty to make a confiscation order against the convicted defendant in the criminal proceedings and deciding as between the prosecution and the defendant whether he has benefited from drug trafficking and, if so, in what sum to make a confiscation order. S.3 and the Crown Court Rules provide for a procedure to be followed involving the service of statements by the prosecutor and the defendant in order to reduce the area of dispute. S.3(2) requires the defendant to particularise what he will rely on in disputing any allegation in the prosecutor's statement and if the defendant fails to do so he may be treated as having accepted the allegation. S.4 provides that the Crown Court may issue a certificate giving the court's opinion as to any matter about which it was satisfied, relevant to its determination of the amount that might be realised at the time the confiscation was made and the court shall issue such a certificate if it has been satisfied that the amount which might be so realised was less than the amount which it has assessed to be the value of the defendant's proceeds of drug trafficking. Nothing in sections 1 to 4 or the Crown Court Rules makes any reference to any right of any other person to intervene or be heard in the Crown Court in any way in connection with these matters.

    15. Sections 6 to 13 and 15 to 18 deal with the enforcement of confiscation orders. S.6 gives the Crown Court and the Magistrates' Courts powers similar to those they have in relation to fines. Sections 7 to 13 confer powers on the High Court as part of its civil jurisdiction. They are of two types. Under sections 7 to 10, restraint and charging orders may be made to preserve property belonging or deemed to belong to the defendant; the definition in s.5(1) of "realisable property" is used. The jurisdiction commences at the time when criminal proceedings are instituted in England or Wales against a defendant for a drug trafficking offence and there is reasonable cause to believe that the defendant has benefited from drug trafficking. The jurisdiction subsists until the proceedings have been concluded, an expression which is broadly defined in s.38(12) so as to include any pending proceedings up to the complete satisfaction of any confiscation order that may have been made. Under s.8, the High Court may prohibit any person from dealing with any realisable property. S.8(4) expressly requires that a restraint order shall be applied for ex parte by the prosecutor to a judge in chambers and that the order shall provide for notice to be given to persons affected by the order. There are obviously two reasons for this latter requirement. The first is so that any such person shall be bound by the order. The second is so that any such person shall have the opportunity to apply to have the order discharged or varied. This was made explicit by RSC O.115 rules 4 and 5 which provide for an inter partes hearing and applications to discharge or vary the ex parte order. The judge may also under s.8(6) appoint a receiver to take possession of realisable property subject to a restraint order. The provisions in sections 9 and 10 for making a charging order follow a similar scheme. However, here, a distinction is made between the realisable property and the defendant's or donee's interest in it and the charge applies only to the interest. The question whether it should be a condition of the charging order that notice be given to any other person holding an interest in the property is left along with the question of the other terms of the order to the judge in chambers.

    16. The second type of power conferred upon the High Court is directed to realising the value of realisable property and applying the proceeds so that the sum payable under the confiscation order can be fully discharged. This is achieved through a receiver appointed by the High Court under s.11. The drafting of s.11 and the associated sections 12 and 13 acknowledge that others besides the defendant and the donee of a gift caught by the Act may have an interest in the relevant property and that, whilst the receiver is given the power to take possession of the relevant property and realise its value, the order does not override or confiscate the interests of others in the value of that property. S.13(4) expressly provides that the powers shall be exercised with a view to allowing any person, other than the defendant or the recipient of a gift caught by the Act, "to retain or recover the value of any property held by him". This would be implicit even in the absence of an express provision since the confiscation order only applies to the convicted defendant and, indirectly through such defendant, donees caught by the Act. To apply it so as to confiscate the property of innocent third parties would be not only exorbitant but also outside the purpose of the Act. Any such confiscation would now also raise Human Rights issues. Sections 11 and 12 support this scheme by providing for others to make representations to the High Court. S.11(8) is expressed in mandatory terms:

The "court" which has the powers referred to is the High Court: see subsection (1). The respondents before your Lordships surprisingly sought to argue that in subsection (8) the court to which such persons were to have a reasonable opportunity to make representations was the Crown Court not the High Court. This argument had been advanced in the Court of Appeal and rightly rejected by Tuckey LJ ([2000] 1 WLR at p 1100G). The relevant court is clearly the High Court seised of the enforcement proceedings. The person entitled to make representations is any person holding any interest in relevant property. The High Court must be prepared to hear representations from any such person (s.11(8)) and allow him to retain or recover the value of his interest in the property (s.13(4)). Again, this requirement of the Act has been carried through into RSC Order 115: rule 8(1) applies (inter alia) rules 4 and 5 to the exercise of the powers under s.11.

    17. The scheme of the Act is thus to enable the monetary order made against the convicted defendant to be enforced by effecting recovery from the defendant's property including property which he has given away during the six year period. This extension of the statutory powers takes into account the obvious possibility that those engaging in drug trafficking may transfer their wealth to others in order to try and frustrate the attempts of the authorities to recover them but without affecting the trafficker's expectation that he will ultimately be able to benefit from the proceeds of his trafficking. The concept of realisable property is used both as a measure of the defendant's current wealth for the purpose of fixing the monetary amount of the confiscation order made and for defining what assets can be used for the purpose of enforcing the order and recovering the relevant sum. Property "held" being widely defined so as to include property in which any relevant person has an interest, it must be contemplated that there is realisable property in which two or more people will have an interest. It is therefore part of the structure of the Act that questions may have to be determined as to the respective interests of different persons in the same property. Although the extent of the defendant's interest is relevant to the Crown Court's assessment of the value of his realisable property, the question of what other persons, if any, have an interest and what is the extent of their interests must be decided by the High Court in the exercise of its jurisdiction.

    18. Turning to the facts of this case, I will take them in chronological sequence. Criminal proceedings were instituted against the defendant, Mr Norris, by the issue of a warrant in May 1989; therefore the six year period started in May 1983. On 26 May 1989 an ex parte restraint order was made by Roch J in chambers restraining the defendant until further order from disposing of any of his property, including some specified items, and a charging order was made in respect of 7 Berryfield Close and Mrs Norris was restrained until further order from disposing of 7 Berryfield Close. This order was served on Mrs Norris. She did not apply to vary or discharge the order. She continued, as the registered owner of the property, to live with her three sons at 7 Berryfield Close as her home - her only home. She had no intention of moving or of disposing of it. The defendant disputed his guilt of the offences with which he was charged. He was tried and convicted. It appears that the evidence at his trial included evidence of observations made of his movements. Since 1988 he had been on the run and evading arrest. In June 1996, the defendant was brought before Judge Brown for sentence and the making of a confiscation order. The Customs and Excise and the defendant were represented. Defence counsel agreed the defendant's proceeds of drug trafficking in the sum of £1,350,000. The amount which might be realised was partly agreed as well but not whether anything should be included for the value of 7 Berryfield Close. The Customs and Excise, without adducing any evidence other than some documents relating to its purchase in 1986 and the purchase of a previous house in 1984, simply submitted that all the beneficial interest in the house was in the defendant and that the registration in the name of Mrs Norris was a sham. Counsel for the Customs and Excise relied upon the burden of proof being on the defendant to disprove this by calling evidence. Counsel for the defendant called Mrs Norris as a witness. She was sworn. She explained that she was on anti-depressants and produced a doctor's letter. She outlined the matrimonial history. The first matrimonial home was a house in Oakdene Road, bought in 1981 for £43,000. She put up £11,000 which she had been given by her grandmother and the defendant put up £12,000 with the balance of the purchase price, £20,000, being borrowed on mortgage. The defendant paid the mortgage instalments. The property and the mortgage was in their joint names. About £25,000 profit was made when in February 1984 they sold the Oakdene Road house. The next house, 9 Prince Consort Drive, Chislehurst, was registered in her own name alone. It was bought with the proceeds of Oakdene and a mortgage. The defendant paid the mortgage. In 1986 she sold Price Consort Drive for £195,000 and, using the proceeds, bought another house in Chislehurst called 'Northwood' with a mortgage for £70,000. She treated it as her house and it was registered in her name. She did not like the house and in 1988 she sold it for £460,000 which enabled her to pay off the mortgage and still have a surplus after paying £350,000 for 7 Berryfield Close. By this time in 1988 the defendant had gone on the run and was no longer living with her and the children. Counsel for the defendant also asked her about other matters relevant only to mitigation of sentence, including the defendant's relations with his brother (who had also been convicted) and his responsibility. He also asked her about her continuing belief in her husband's innocence.

    19. She was cross-examined by counsel for the prosecution. She was asked about the matrimonial history and the financing of the various house purchases. It was put to her:

to which she responded:

She was questioned about various details presumably with a view to undermining her credit - or her memory since she did not have access to the relevant documents. In re-examination she was asked further about various details which again she had to answer without seeing relevant documents. Nothing new was put forward in the final speeches and counsel for the defendant devoted his main submissions to mitigation and the relative parts played by the various defendants. Counsel agreed the net value of 7 Berryfield Close at £300,000. The Judge then gave his judgment. He summarised the evidence of Mrs Norris and the submissions of counsel and concluded:

He made a confiscation order in the sum of £386,397, the limiting factor being the amount which might be realised, £300,000 for the house and £86,397 for other items of cash and chattels. He sentenced the defendant to 9½ years imprisonment. No certificate under s.4(2) was issued (perhaps because a reasoned judgment had been given).

    20. From the point of view of Mrs Norris, the next thing which happened was the ex parte application under s.11 for the appointment of a receiver and a declaration which was heard by Latham J on 4 February 1999. She has stated in her uncontradicted affidavit that she only heard about this application as a result of a telephone call from the defendant's solicitors two days before. She applied on affidavit to set aside or vary the order so far as it related to 7 Berryfield Close. The affidavit (dated 4 March 1999) sets out on oath and with supporting documents her case for submitting that she had at least a 50% interest in the property. The Customs and Excise have filed no affidavit in response to that of Mrs Norris but simply relied upon the affidavit dated 19 January 1999 which had led the ex parte application. That affidavit had been made by an employee of the Customs and Excise on the basis of a perusal of the papers in the case. It referred briefly to the order that had been made by Judge Brown and the fact that he had found that the defendant held the entire beneficial interest in 7 Berryfield Close after he had heard and rejected the evidence of Mrs Norris who had been called by the defendant. The transcript of the Crown Court hearing of 24 June was exhibited. The declaration was asked for on the basis that "Mrs Norris has been heard, cross-examined and failed in an attempt to persuade a court of competent jurisdiction that she has an interest in the property". This was the basis upon which the Customs and Excise applied to strike out the application of Mrs Norris as an abuse of the process of the court. They did not apply on the basis that she had no interest in making her application; she patently did have such an interest. They do not have any evidential basis for suggesting that she is making her application in bad faith. Nor do they say that the facts stated in her affidavit, corroborated by the documents which she exhibits and which are presently uncontradicted, do not, if accepted, provide a good arguable case that she has at least some interest in 7 Berryfield Close. In her affidavit she has been able to exhibit independent corroboration for the fact that at the time of her purchase of the Prince Consort Drive property in July 1984, she had borrowed £20,000 from each of her sister and brother in law, sums which were subsequently repaid when the property was remortgaged in December of that year. Similarly she has been able to find evidence that the £35,000 cash deposit which she paid when purchasing Berryfield Close in 1988 had been borrowed from a Mr Thompson, whose address is given and whom she describes as a family friend, and subsequently repaid out of the proceeds of the sale of 'Northwood'. The Customs and Excise simply submitted that it was an abuse of process to raise in subsequent civil proceedings a case which had earlier been rejected in the criminal proceedings, notwithstanding that she had not been a party to those proceedings and had had no right to be represented and had simply been called as a witness. She says in her affidavit that she had never been independently advised about her own legal position.

    21. Latham J accepted the argument of the Customs and Excise. He followed an earlier decision of Buxton J in In re K (unreported), 3 July 1995, that the Crown Court decision was conclusive and bound even unrepresented third parties who had had no opportunity to present contrary arguments. "It is not intended in enforcement proceedings ... to reopen findings made by the Crown Court as to whether property is realisable and the ownership of it." He applied a dictum in R v Robson (Stephen) (1990) 92 Cr App R 1,5:

Latham J also referred to the fact that Buxton J had rejected the right of a third party to challenge the enforcement proceedings on the ground that the defendant's only right was to appeal the confiscation order. Latham J, apparently with some regret, held that he should follow Buxton J and hold that she could not reopen the issue which was determined by the Crown Court. He gave her leave to appeal.

    22. In the Court of Appeal, the Customs and Excise did not seek to uphold the decisions of Buxton and Latham JJ in so far as they said that the High Court had no jurisdiction in any circumstances to reopen the findings of the Crown Court on the application of a third party: [2000] 1 WLR 1094, 1098G The Court of Appeal considered that this concession was rightly made and the judgment of Buxton J could not be supported. I agree with the Court of Appeal on this point. The argument on the construction of the Act having been abandoned, the Customs and Excise based their case on a different submission that there was a spectrum of possible situations and the relevant consideration was abuse of process. Counsel submitted that Mrs Norris fell on the wrong side of the line.

    He relied upon Hunter v Chief Constable of the West Midlands Police [1982] AC 529 and Ashmore v British Coal Corporation [1990] 2 QB 338. Tuckey LJ accepted this argument. He considered that "if the third party has had a fair opportunity to put his or her case at the earlier hearing there is nothing unfair" in preventing him or her relitigating an issue which had been decided in proceedings to which he or she was not a party. Referring to s.11(8) he said:

Tuckey LJ distinguished this from the situation where the third party has had a "fair opportunity to put his or her case to the Crown Court and is asking to relitigate issues decided in the Crown Court on the same or substantially the same evidence and submissions". He described this as an abuse of process.

Applying this reasoning to the facts of the case, he concluded that the interests of Mrs Norris were "adequately represented" by leading counsel for the defendant. She and the defendant were making common cause about their respective interests in the house. The evidence she gave in the Crown Court was substantially the same as that she wants to give in the High Court; she was disbelieved in the Crown Court. The Court of Appeal dismissed Mrs Norris's appeal from the order of Latham J refusing to entertain her case that she had an interest in 7 Berryfield Close.

    23. My Lords, the reasoning and decision of the Court of Appeal depends upon the view which they took of the breadth of the principle of abuse of process and their assessment of what had occurred in the Crown Court. I consider that neither can be supported. Underlying their reasoning on both aspects was their failure fully to respect the view they had rightly taken of the legislation. Once the view taken by Buxton J was shown to be erroneous and the requirement of the High Court to hear the representations of interested parties recognised, the Court of Appeal should have given effect to the division of responsibility and function between the Crown Court exercising the criminal jurisdiction and the High Court exercising the civil jurisdiction. The criminal jurisdiction is concerned alone with what order to make under sections 1 to 4 of the Act. The procedure of the criminal court is solely concerned with the parties before it, the prosecution and the defendant. In some situations the Crown Court may also make compensation or restitution orders in favour of third parties who are given a right to apply (eg under sections 148 and 149 of the Powers of Criminal Courts (Sentencing) Act 2000), order property to be forfeited (eg vehicles used in the commission of the relevant crime) or to be returned to the loser (eg under the Theft Acts). But it is well established that these powers are only to be used where there is no disputed civil law right or similar issue which needs to be determined (eg s.148(5) of the Act of 2000). If there is such an issue, the proper course for the Crown Court to take is to leave the relevant person interested to pursue his or her civil remedy in the civil courts: R v Ferguson (1970) 54 Cr App R 410 and R v Calcutt (1985) 7 Cr App R (S) 385. The English system of criminal justice does not itself confer any civil jurisdiction upon the criminal courts and it takes a clear and express provision in a statute to achieve that result. The 1986 Act does not contain any such provision; indeed, as already explained, its clear intention is to preserve the distinction between the respective jurisdictions. The time and place for Mrs Norris to assert her civil law rights over 7 Berryfield Close was when the Customs and Excise attempted in the High Court to deprive her of her interest. It is at this stage that she becomes directly affected and has the right to invoke the remedies of the court in the defence of her civil law rights. In the criminal court she was a mere witness with no right of representation and no control of the proceedings and no right of appeal. It is relevant to observe that Lord Hoffmann remarked upon the same division of jurisdiction between the criminal and civil courts in Government of the United States of America v Montgomery [2001] HL1§22.

    24. It was wrong to say that her interests were identical with those of her husband. Indeed their proprietary interests were in principle opposed to each other. They were competing rights of property giving rights to one spouse against the other. It was in the interest of the defendant to put forward in the Crown Court the interest of his wife because he could use it to get a reduction in the confiscation order which was going to be made against him. But the wife's interests were not and are not the same as those of her husband. She wishes to preserve for herself and her children her right to live at Berryfield Close against her husband if necessary and against anyone claiming through him. The defendant also had an interest in mitigating the sentence of imprisonment which he was going to receive. The proceedings in the Crown Court were for the benefit of the defendant and the Customs and Excise, not Mrs Norris.

    25. These points are further reinforced by the reasons given by Judge Brown (which I have quoted in paragraph 10) and in particular by the parts I have italicised. Judge Brown placed the burden of proof upon the defendant to satisfy him that the amount that might be realised was less than the assessed proceeds: s.4(3). He treated himself as entitled to make presumptions against the defendant. He took into account the whole of the evidence which had been given in the course of the criminal trial. He discredited Mrs Norris as a witness because the defendant's counsel had elicited from her her belief in her husband's innocence. In the civil proceedings the starting point is that Mrs Norris is the registered freehold owner of the property and in occupation of it. Her apparent title has to be displaced by evidence. If she is considered to have only a partial interest, which she recognises is a possible view, the extent of that interest has still to be determined. No presumptions are to be made against her. The burden of proof is upon the Customs and Excise. The only case now being made against her is the claim to 7 Berryfield Close. In order to identify what are the beneficial interests in that property, it will be necessary to trace where possible the history of the contributions made to the sequence of properties which preceded the purchase of 7 Berryfield Close. It appears from the affidavit she has now sworn and the exhibits to it that at least some of the presumptions made by Judge Brown may be wrong and that his wholesale rejection of her evidence may have been unjustified. She has evidence to raise an arguable case that she has at least an interest in 7 Berryfield Close and it would appear that what happened in 1984 when Oakdene Road was sold and Prince Consort Drive purchased may arguably have involved a contribution from the defendant as low as £18,750 or 15 % of the purchase price of £120,000. The evidence admissible against her will be the evidence adduced in the High Court proceedings. Judge Brown was not engaged in an exercise of determining her rights in accordance with the civil law. Because of this, she was never given, nor was it intended that she should be given, the right in the Crown Court to place before Judge Brown, though counsel representing her and supported by the documentary and other evidence which she chose, her civil case. The issues to be determined in the Crown Court and in the High Court are related but are not the same. To adapt the language of Lord Diplock in the Hunter case [1982] AC 529, at 536 and 541, the question decided in the Crown Court was not on any view "identical" to that to be decided in the High Court nor was the Crown Court a "competent court" to decide against Mrs Norris what are her rights. Mrs Norris is not "misusing" the procedure of the High Court; she is making the proper use of the civil jurisdiction of the High Court to protect her proprietary rights as the 1986 Act contemplates that she should.

    26. The principles applied in the cases of Hunter and Ashmore do not apply. In Hunter the plaintiff was engaged in trying to relitigate in a civil court a factual issue which had already been decided against him in a criminal case in which he had been a party. It involved a collateral attack upon a decision in previous proceedings to which he had been a party, fully represented and with complete control over the evidence he wished to put before the court. The plaintiff had "had a full opportunity of contesting the decision in the court by which it was made": per Lord Diplock at p 541. The present case does not have those features. The Ashmore case is essentially a case of the marshalling of litigation. Where a civil court (or tribunal) is faced with an incident for which a defendant may be liable and which injured a large number of people or some situation where a large number of people similarly placed wish to make a contested claim against another, as was the case with the sex discrimination claim against the British Coal Board being made in the Ashmore case, the court, as a necessary part of the administration of justice, has to be prepared to make orders requiring the interested parties to come forward so that appropriate cases can be selected for trial and the parties can address the court upon whether their case raises any different issues from those selected. Each party has an opportunity to persuade the court that its case requires special treatment and should not follow the result of the selected cases. Any aggrieved party may seek to appeal such a procedural order. Where some interested party has been content not to intervene and awaits the outcome of the substantive trial, he must abide by the result, even if adverse, save possibly for seeking belatedly to intervene in order to support an appeal against the substantive decision. Simply to seek to relitigate the whole thing over again is an abuse of process and will not be allowed, as is more fully explained in the judgment of Stuart-Smith LJ in that case, [1990] 2 QB 338, at 345-355. These are illustrations of the principle of abuse of process. Any such abuse must involve something which amounts to a misuse of the litigational process. Clear cases of litigating without any honest belief in any basis for doing so or litigating without having any legitimate interest in the litigation are simple cases of abuse. Attempts to relitigate issues which have already been the subject of judicial decision may or may not amount to an abuse of process. Ordinarily such situations fall to be governed by the principle of estoppel per rem judicatem or of issue estoppel (admitted not to be applicable in the present case). It will be a rare case where the litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse. As previously explained, the present case does not involve such relitigation nor is there evidence to support the more simple types of abuse. Your Lordships were also referred to the recent decision of the Court of Appeal in Gokal v Serious Fraud Office [2001] EWCA Civ 368, a case under the comparable provisions of the Proceeds of Crime Act 1995. The Court of Appeal distinguished between the position of the defendant who in the Crown Court, with the burden of proof resting upon him, could seek to satisfy that court that the amount which might be realised at the time the confiscation order is made would be less than the amount of benefit he had from the relevant offence or offences, who had a right of appeal and was thereafter bound by the outcome (§17) and the position of a third party such as Mrs Norris (§41). For the defendant to seek to reopen the decision by which he is bound was an abuse of process.

    27. A different procedural remedy might have been available to the Customs and Excise if the case had justified it. This is best illustrated by the Civil Procedure Rules, Part 24. If a party to litigation is pursuing a case with no real prospect of success, the court can recognise that situation and proceed to give judgment in accordance with the inevitable outcome of the litigation. If a case is patently and inevitably not going to succeed, the court is empowered to cut out the later formalities and proceed straight to judgment. A predecessor of Part 24, RSC O.14, followed a similar logic of adopting procedures which enable justice to be done without undue delay and expense. There are some similarities between these remedies and striking out for abuse of process but they are not the same. Before your Lordships, the Customs and Excise have urged your Lordships to dismiss this appeal since to fail to uphold the judgment of the Court of Appeal would be to create an inappropriate hindrance in the way of the enforcement of confiscation orders through the civil courts. But this is not so. If the third party is seeking to resist enforcement on grounds which can be seen to be bound to fail, then there is no reason why enforcement should be held up. If, on the other hand, there is something in the third party's defence in the civil proceedings, it should be determined in accordance with the normal civil procedures. In the present case, the Customs and Excise sought to treat the previous decision of the Crown Court as conclusive of any question which Mrs Norris might raise in the High Court. They did not at all enter upon the merits of what she was deposing to in her affidavit. The Customs and Excise were wrong in the stand that they had taken, as the had to concede in the Court of Appeal. But this does not mean that in other cases where the third party's case is manifestly without substance, summary procedures under Part 24 may not meet the needs of speedy justice.

    28. My Lords, I consider that the appeal should be allowed and that Mrs Norris be allowed to proceed with her defence to the claim which the Customs and Excise are making against her. The Customs and Excise must prove their case against her.

    29. Before concluding, I should add a number of footnotes. The Act of 1986 has been repealed and replaced by revised and more comprehensive legislation. It is not appropriate to discuss the current legislation but, although some aspects have been changed, like the requirement that the confiscation order should be made at the same time as the defendant is sentenced, and greater flexibility has been introduced, the treatment of third party rights and the role of the civil courts does not appear to have materially altered. The law and the criminal procedure in Scotland is not in all respects the same as that in England and Wales. Aspects of the Scottish law were considered in Advocate General for Scotland v McIntosh [2000] DRA 12. It would have been necessary to refer to this authority had the present appeal turned upon arguments under the Human Rights Act 1998. However although such arguments were addressed to your Lordships on this appeal, the appeal has been decided upon the consideration and application of well established principles of English law and the natural, and I believe, clear meaning of the 1986 Act. Had the position been different, it would have been necessary to consider whether the appeal should be allowed on the basis that Mrs Norris's rights under the Human Rights Act would have been infringed.


© 2001 Crown Copyright


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