Adams, Re In the matter of the Criminal Justice Act 1988

For a certificate of inadequacy, realisable property includes all property held by the defendant, including legitimately acquired property obtained after the confiscation order. However, a personal contract for services is not realisable property where it is non-assignable and summarily terminable. An entitlement to future payment under such a contract is conditional on the contract continuing and the services being provided. It is therefore not a present chose in action or property held by the defendant. The court must determine realisable property afresh and is not confined by the Crown Court’s earlier assessment.

The defendant had been convicted of theft and made subject to a confiscation order. He applied to the High Court for a certificate of inadequacy under section 83(1) of the Criminal Justice Act 1988. He contended that property previously taken into account had become valueless and that a consultancy contract entered into after the confiscation order was not realisable property.

The Crown Prosecution Service argued that the consultancy contract and the income entitlement under it were realisable property. The central issue was whether either constituted property held by the defendant for the purposes of the statutory scheme.

1. Certificate of inadequacy. The court held that the defendant was entitled to a certificate of inadequacy, conditional on completion of the sale contract and production of specified evidence concerning his wife’s assets and loan. Enforcement of the confiscation order was stayed.
2. Scope of realisable property. Under section 74(1) of the Criminal Justice Act 1988, realisable property is not confined to property representing the proceeds of crime. It includes legitimately acquired property obtained after the confiscation order. The High Court determines the realisable property for the application and is not bound by the Crown Court’s earlier determination: Re Glatt [2002] EWHC 2495 (Admin); Re O’Donoghue [2004] EWHC 176 (Admin).
3. Consultancy contract. The consultancy contract was a chose in action, but it was personal to the parties because the defendant’s identity as service provider was essential. It was non-assignable and could be summarily terminated by either party. It was therefore not realisable property.
4. Future remuneration. The contractual entitlement to payment for future services was not a present chose in action. It depended on the contract continuing and the services being provided. A conditional and future entitlement of that kind was not property, still less realisable property. The position differed from an existing debt, a contractual right to payment on a future date, or a contingent beneficial interest under a will. The court relied on principle and the balance of authority, including Re Walbrook and Glasgow (1994) 15 C.App R (S) 783 and Norman v Federal Commissioner of Taxation (1963 109 CLR 9.

The Southwark Crown Court made the confiscation order on 1 March 2004. The defendant then applied to the High Court for a certificate of inadequacy under section 83(1) of the Criminal Justice Act 1988. The High Court granted the application conditionally.