J v Crown Prosecution Service

For a restraint order under the Criminal Justice Act 1988, a defendant obtains criminal property where his acts make a non-trivial contribution to its acquisition. He need not retain the property or have separate control of it. A restraint order is provisional and protective. It may preserve assets against each of several defendants for the full apparent proceeds of crime, pending final confiscation proceedings.

A prosecutor applying without notice must make full and frank disclosure of material facts. A breach does not automatically require discharge. The court must weigh the public interest in an effective confiscation regime against the need to prevent unfair State action. Delay is relevant where it bears on a real risk of dissipation.

The appellant was charged with conspiracy to defraud through a company which took administration fees from loan applicants but made no loans. The Crown Prosecution Service obtained, without notice, a restraint order over his assets under the Criminal Justice Act 1988.

Leveson J in the Administrative Court continued the order. The appellant contended that the CPS had failed to disclose financial material and a letter concerning a proposed remortgage, and that the evidence did not justify restraint based on the company’s apparent proceeds. The appeal raised the meaning of criminal "benefit", the proper scope of a restraint order, and the consequences of non-disclosure and delay in a without-notice application.

1. Appeal dismissed unanimously. Laws LJ gave the principal judgment. Longmore LJ agreed with the disposition and the answers given on the procedural issues. Lloyd LJ agreed.

2. Under section 71(4), a defendant benefits where he obtains property through crime. That does not require retention or personal profit. The defendant’s acts must have contributed, other than de minimis, to obtaining the property. Separate control over it is not an additional requirement. More than one participant may therefore obtain the same proceeds, with the possibility of concurrent confiscation orders.

3. A section 77 restraint order is pre-emptive and provisional. It is not a final assessment of benefit or realisable property. Its purpose, consistently with section 82(2), is to preserve available assets so that a later confiscation order can be effective. Where several defendants may have materially obtained the apparent proceeds, the court may restrain each defendant’s assets by reference to the whole ascertainable sum. The fact that another defendant may have retained most of the money did not undermine this order.

4. The corporate-veil argument failed. The order restrained the appellant’s own assets. It did not treat company-owned assets as his realisable property, so no adjudication about piercing the veil arose.

5. Delay in seeking restraint can bear on whether there is a real risk of dissipation, especially after charge and where assets have not been dissipated. It is not normally decisive. The governing question remains whether protection is needed to secure the efficacy of a potential confiscation order.

6. The CPS owed the same duty of full and frank disclosure as an applicant for a freezing order. The undisclosed financial material was not material on the proper approach to benefit and restraint. The August letter was material but its inadvertent non-disclosure did not require discharge. It could increase, rather than reduce, concern about dissipation. A without-notice restraint application will normally be appropriate where there is a reasonable apprehension of dissipation, although the court must balance the public interest in confiscation against the need to prevent arbitrary or unfair State action.

• Court of Appeal (Civil Division): Appeal dismissed unanimously: [2005] EWCA Civ 746.

• High Court, Queen’s Bench Division, Administrative Court: Leveson J continued the restraint order on 24 November 2004, while ordering the CPS to pay the appellant’s costs of that application.

• High Court: Forbes J made the restraint order without notice on 2 November 2004 under the Criminal Justice Act 1988.