In the Matter of Houssam Ali; Re Drug Trafficking Act 1994

For a certificate of inadequacy under section 17 of the Drug Trafficking Act 1994, the applicant bears the burden of proving, on the balance of probabilities, that realisable property is inadequate to meet the confiscation order. A debt remains realisable property despite difficulties in recovering it. Evidence that recovery is difficult, including an unsupported assertion that the debtor is impecunious, does not establish irrecoverability.

The applicant had been made subject to a confiscation order under the Drug Trafficking Act 1994. Most of the order represented a debt owed to him by a borrower who was subsequently imprisoned in Australia for a drug offence. The applicant sought a certificate of inadequacy under section 17(3), arguing that the debt was irrecoverable.

Pitchford J refused the application on the basis that irrecoverability had not been established. The applicant renewed his application for permission to appeal. The central issue was whether the debt constituted inadequate realisable property for the purposes of section 17.

1. Application dismissed. The applicant failed to prove that the debt owed by Mr Grimwood was irrecoverable.
2. Section 17(3) places the burden of proof on the applicant. The relevant question was whether the chose in action comprising the right to recover the loan was inadequate for payment of the outstanding confiscation order.
3. The court considered R v Liverpool Magistrates' Court ex parte Ansen [1998] 1 All ER 692. May J had held that a debt was realisable property irrespective of difficulty in actual recovery. That decision did not establish that a debt ceased to be realisable merely because the applicant proved that recovery was impossible.
4. The evidence fell short of the required standard. The solicitor’s correspondence sought detailed information about investigations into the debtor’s financial position, but the response contained only an oral assertion that he was impecunious. The applicant therefore showed, at most, that recovery was likely to be difficult.
5. The court noted that the legislation was deliberately stringent for policy reasons. The burden remained on the applicant even if, on the facts, he might have had no further practical means of obtaining evidence. The application was dismissed, with no order for costs.

• Court of Appeal (Civil Division): renewed application for permission to appeal dismissed. The court upheld the decision of Pitchford J refusing a certificate of inadequacy.
• High Court, Administrative Court: Pitchford J refused the applicant’s application on 9 July 2002.