Port, R v

Before making a prosecution-costs order against an undischarged bankrupt, a court must expressly consider both the debtor’s liabilities to creditors and the money available to the debtor. It should make the best assessment it can of each. A costs order is appropriate only where funds are likely to remain after the creditors’ claims have been met.

An order should not be made merely because it may become enforceable after the automatic discharge from bankruptcy. The court must also consider the circumstances likely to exist when enforcement could occur.

The appellant was convicted at Harrow Crown Court of being concerned in the management of a company while an undischarged bankrupt, contrary to section 11 of the Company Directors Disqualification Act 1986. He was sentenced to imprisonment and ordered to contribute £175,000 towards the prosecution’s costs.

He appealed, by leave of the single judge, against the costs order only. The sentencing judge had concluded that the appellant had access to substantial funds, but had not assessed his outstanding creditors’ claims or whether any funds would remain after those claims. The central issue was whether the judge had properly considered the means of an undischarged bankrupt before making the costs order.

1. The appeal was allowed and the prosecution-costs order was quashed.

2. A court considering an order for compensation, confiscation or a contribution to prosecution costs must have regard to the defendant’s means. Where the defendant is an undischarged bankrupt, this requires express consideration of the bankruptcy and of the debts owed to creditors.

3. The court should, so far as possible, assess the amount owing to creditors and the money available to the bankrupt on the balance of probabilities. Money or property available to the bankrupt is ordinarily available to the trustee in bankruptcy. A costs order may nevertheless be proper where the court considers that the available funds are sufficient both to satisfy creditors and to meet the order.

4. The court accepted the approach in Michel (1984) 6 Cr App R(S) 379, while recognising that the relevant qualification was that such concurrent orders would very seldom, rather than never, be appropriate.

5. The sentencing judge had focused on funds said to be accessible to the appellant, but had not undertaken the required assessment of creditor liabilities and any likely surplus. Nor was it satisfactory to make an order intended to bite only upon discharge from bankruptcy in ten years’ time without considering the circumstances likely then to exist. The Court could not know what order would have been made had the point been addressed, and therefore quashed the order.

• Court of Appeal (Criminal Division): Allowed the appeal against the prosecution-costs order and quashed that order.
• Harrow Crown Court: Following conviction, imposed imprisonment and ordered the appellant to pay £175,000 towards prosecution costs.