Hughes & Ors v HM Customs & Excise

Receivers appointed under the confiscation legislation are to be treated like common-law receivers unless the statute expressly provides otherwise. Their remuneration and expenses may therefore be recovered from assets under their control before any confiscation order is made.

Sections 81(5) and 88(2) regulate payment of outstanding sums and the prosecutor’s liability where the receiver has not been paid. They do not prevent interim recovery from the receivership assets.

Recovery of those costs from an unconvicted or acquitted defendant does not, without more, breach Article 1 of the First Protocol. Compensation remains subject to the statutory conditions in Criminal Justice Act 1988, section 89.

These conjoined appeals concerned receivers appointed by the High Court under Part VI of the Criminal Justice Act 1988 and the corresponding provisions of the Drug Trafficking Act 1994.

In Hughes & Ors v HM Customs & Excise and R & Another v Crown Prosecution Service, the defendants had not been convicted when the receivership costs issue was decided. Hooper J held that the costs could generally be recovered only after conviction and confiscation, subject to unreasonable obstructive conduct. In Anderson v HM Customs & Excise, Collins J permitted limited recovery because the defendant had been convicted.

The prosecution appealed. The central questions were whether statutory receivers could recover remuneration and expenses from controlled assets before a confiscation order, and whether that result was compatible with Article 1 of the First Protocol.

1. Appeals allowed. The prosecution appeals in all three cases were allowed, with costs here and below against the unsuccessful respondents.
2. Per Lord Justice Simon Brown, statutory receivers are recognisable common-law receivers unless the legislation expressly provides otherwise. The ordinary common-law consequence is that a receiver looks to the assets within the receivership for remuneration and expenses. Part VI of the Criminal Justice Act 1988 does not create a wholly self-contained code excluding that consequence.
3. Section 81(5) operates after money has been paid to the justices’ clerk. The receiver must then be paid remuneration and expenses from that money because the gross payment reduces the amount outstanding under the confiscation order under section 81(3). It does not follow that the receiver cannot recover costs from the assets before a confiscation order is made.
4. Section 88(2) is a supplementary provision. It requires the prosecutor to pay any amount of remuneration and expenses which remains outstanding if no sum is available under section 81(5). It is not a prohibition on prior payment from the receivership assets.
5. The arrangement is not incompatible with Article 1 of the First Protocol. The restraint and receivership regime serves the public interest in preserving assets for confiscation. The absence of automatic compensation for acquitted or unconvicted defendants is not disproportionate or arbitrary. Section 89 provides a limited compensation route where there has been serious fault on the part of a person involved in the investigation or prosecution.
6. Courts must exercise careful control when making, varying or discharging restraint and receivership orders. They must balance the public interest in preventing dissipation of assets against the risk that costs will fall on an innocent person, and must ensure that costs are not incurred too readily. RSC Order 30, rule 3 requires the court to retain control over the authorisation and fixing of the receiver’s remuneration.
7. Lady Justice Arden agreed and added that the statutory scheme’s silence concerning a receiver’s lien and remuneration after vacating office supports the implication that those matters remain subject to the High Court’s ordinary jurisdiction. She reserved for a future case the question whether Convention rights might require compensation for persons never charged where there had been serious prosecutorial default.

• Court of Appeal (Civil Division): appeals from decisions of Hooper J and Collins J were allowed. The court held that receivers appointed under the confiscation legislation could recover remuneration and expenses from assets under their control before a confiscation order.