Forwell, Re Drug Trafficking Offences Act 1986

Where realisable property is inadequate to meet a confiscation order, Drug Trafficking Offences Act 1986 section 14(1) requires a certificate of inadequacy. The High Court’s discretionary power under section 14(2)(b) to disregard inadequacy is limited to conduct undertaken for the purpose of preserving a gift caught by the Act from realisation.

A refusal to issue a certificate must reflect that the certificate is the statutory starting point once inadequacy is established. The court must give adequate reasons for exercising the discretion in the prosecution’s favour and must consider material circumstances, including the purpose for which the gifted property was dissipated. An appeal lies because a decision on a certificate is collateral to the criminal cause or matter.

The appellant had been convicted of drug trafficking offences and made subject to a confiscation order. Although she had paid part of the amount, a substantial shortfall remained. Gibbs J, sitting in the Administrative Court, found that she had no further assets available but refused a certificate of inadequacy under section 14 of the Drug Trafficking Offences Act 1986.

The judge held that funds transferred to Singapore were a gift caught by the Act. He found that the appellant had substantially contributed to their dissipation and exercised the section 14(2)(b) discretion to disregard the resulting inadequacy. On appeal, the central issues were the proper exercise of that discretion and whether the Court of Appeal had jurisdiction to entertain the appeal.

1. Appeal allowed. The High Court’s refusal to issue a certificate of inadequacy could not stand. Once it was satisfied that realisable property was inadequate, section 14(1) of the Drug Trafficking Offences Act 1986 made a certificate the statutory consequence unless the court exercised its discretionary power under section 14(2)(b) to disregard the relevant inadequacy.

2. Section 14(2)(b) concerned inadequacy attributable to conduct undertaken for the purpose of preserving property held by the recipient of a gift caught by the Act from realisation. The power should be construed narrowly. It was capable, in an appropriate case, of permitting disregard of only the inadequacy referable to the gift, rather than all inadequacy.

3. The appellant’s assent to expenditure on feeding and educating her children did not readily show a purpose of preserving property from realisation. The effect of her conduct was not enough. The judge also failed to address the material distinction between a defendant who dissipates her own assets, for whom a certificate could be issued, and a defendant who facilitates the dissipation of gifted assets for her children’s support.

4. The judge did not articulate adequate reasons for exercising the discretion in the prosecution’s favour. He appeared to have treated the discretion as one sought by the appellant, whereas the ordinary consequence of established inadequacy was a certificate. His possible belief that hardship could be remedied on enforcement was also unsafe, since the court proceeded on the basis that the enforcing magistrates had no power to reduce the confiscation order.

5. The respondent’s jurisdiction objection failed. Applying the distinction stated in In re O, a decision on a certificate of inadequacy was collateral to, rather than a judgment in, a criminal cause or matter. The Court of Appeal therefore had jurisdiction.

• Court of Appeal (Civil Division): Allowed the appeal in [2003] EWCA Civ 1608 and set aside the refusal of a certificate of inadequacy.
• Queen's Bench Division, Administrative Court (Gibbs J): Refused the appellant a certificate of inadequacy under section 14 of the Drug Trafficking Offences Act 1986.