Gokal v Serious Fraud Office

An application for a certificate of inadequacy under section 83 of the Criminal Justice Act 1988 must address a genuine post-order inadequacy in realisable property. It cannot reopen findings made when the confiscation order was imposed or cure evidential deficiencies which could have been addressed then or on appeal.

The benefit and realisable-property stages are distinct. However, a defendant who successfully maintained that corporate assets were not obtained by him at the benefit stage cannot later assert that those same assets are his realisable property. That inconsistent position is an abuse of process. Pre-order dissipation of gifts must likewise be raised when the court decides whether it is appropriate to take the gifts into account.

The appellant had been convicted of conspiracy offences arising from frauds involving the Gulf Group and BCCI. A confiscation order for £2,943,115 was made in 1997. His criminal appeal against the order was dismissed.

After defaulting on the order, he applied to the High Court for a certificate of inadequacy under section 83 of the Criminal Justice Act 1988. He relied principally on later realisations of Gulf Group assets by BCCI's liquidators and on alleged dissipation of gifts by relatives. Newman J struck out the application as an abuse of process.

The central issue was whether the application identified a post-order inadequacy in property found to be realisable, or instead sought impermissibly to reopen the confiscation proceedings.

1. Appeal dismissed. Keene LJ gave the leading judgment. Robert Walker LJ agreed with its reasons and added observations. Simon Brown LJ agreed with both judgments.

2. A certificate under section 83 of the Criminal Justice Act 1988 is not an additional appeal from a confiscation order. A defendant who alleges that realisable property is inadequate must show what has happened since the order to the property found to have existed when it was made. He cannot use the certificate procedure to present evidence that was available, but not deployed, at the confiscation hearing or on appeal.

3. The proposed reliance on realisations of Gulf Group assets failed for two independent reasons. Buxton J had not found that the appellant's realisable property included an interest in those corporate assets. More fundamentally, although benefit and realisable property involve different statutory inquiries, the appellant had successfully resisted treating assets obtained by the companies as assets obtained by him for the benefit calculation. He could not subsequently assert that the same assets were his property for the purpose of reducing the confiscation liability. That was an inconsistent use of the process.

4. The gifts were included in the amount that might be realised. Whether pre-order dissipation made it inappropriate to take a gift into account under section 74(10) had to be raised at the confiscation hearing. The appellant's proposed evidence either concerned dissipation before the order or gave no adequate basis for alleging post-order dissipation. Its use under section 83 was therefore an abuse of process. The court left open the consequences of proved post-order dissipation by donees.

5. The appellant could not advance a free-standing third-party-rights argument when no donee had applied to assert such rights. The High Court was right to strike out the application, and the appeal was dismissed with costs.

• Court of Appeal (Civil Division): In Gokal v Serious Fraud Office [2001] EWCA Civ 368, dismissed the appeal and upheld the strike-out.
• High Court, Queen's Bench Division: Newman J struck out the appellant's section 83 application as an abuse of process.
• Court of Appeal (Criminal Division): Dismissed the appellant's appeals against conviction, sentence and the confiscation and related orders on 11 March 1999.