Rezvi, Re the Criminal Justice Act 1988

The court has power to permit restrained or receivership assets to be used for a defendant’s legal costs, including costs of appealing a confiscation order. That power arises from the exceptions permitted by sections 77 and 80 of the Criminal Justice Act 1988. The general direction in section 82 that assets should be made available to satisfy a confiscation order does not remove that specific power. Nor does section 82(6) require the court to disregard an exception permitting legal expenses. Section 81(1) is not a general mechanism for paying third-party debts, although the court may direct payment where necessary to prevent a receiver or public authority acting inequitably or unethically.

The defendant had been convicted of theft and made subject to a confiscation order under the Criminal Justice Act 1988. A restraint order and a receivership order had been made over his realisable property. His solicitors sought an order requiring the receiver to pay their costs of his unsuccessful appeal against the confiscation order.

The defendant and the Crown Prosecution Service argued that sections 82(2) and 82(6) precluded payment after the confiscation order. The solicitors relied on the court’s power to specify exceptions and conditions in restraint and receivership orders. The central issue was whether legal costs, including costs of an appeal, could be paid from restrained or receivership assets.

1. The application raised a question of statutory power. An order requiring the receiver to pay the solicitors’ debt was not an exception or condition within section 77(1) or section 77(8) of the Criminal Justice Act 1988. Section 81(1) did not generally authorise payment of third-party debts from sums held by a receiver. It principally concerned insolvency practitioners’ expenses and expenses of the receivership.
2. Legal-cost exceptions remained available. Section 82(2), directing that the statutory powers be exercised to make assets available for satisfaction of the confiscation order, had to be read subject to the express provision for legal expenses in section 77(2). A restraint order could therefore include an exception permitting legal costs. The same applied to a receivership order under section 77(8), and to a receivership order under section 80(3)(b), notwithstanding that section 80 contained no express equivalent to section 77(2).
3. The timing of the costs did not alter the position. Section 77 applied before and after conviction and the making of a confiscation order. The relevant statutory distinction was between the period before and after appeals against the confiscation order had been exhausted, not between the periods before and after the order itself. It would be anomalous to permit payment immediately before the order but prohibit payment of the same costs afterwards.
4. Section 82(6) was similarly limited. It concerned pre-existing obligations to third parties. It did not require the court to ignore an exception permitting payment of legal or living expenses incurred during the restraint period.
5. The court also observed that section 81(1) could support payment where necessary to prevent the receiver, as an officer of the court, or the CPS, as a public authority, from acting inequitably or unethically. That possible jurisdiction had not been argued. The approach was consistent with ex parte James (1874) LR 9 Ch App 609.
6. The conclusion was supported by the binding decision in Commissioners of Customs and Excise v Norris [1991] 2 All ER 395. Re Peters [1988] 1 QB 871 was distinguishable because it concerned anticipatory discharge of family obligations, while current liabilities remained payable. Re P and W [1990] TLR 299 was consistent with permitting legal costs, including after taxation.
7. The court held that it had power to permit payment of legal costs before or after a confiscation order, including costs incurred in appealing that order. Further submissions were directed before the final order was made.