P v HM Customs & Excise

A certificate of inadequacy under section 83 of the Criminal Justice Act 1988 requires a present factual finding that the defendant’s realisable property cannot meet the unpaid confiscation sum. Property treated by statute as realisable remains relevant even where it is practically or legally difficult to recover. A certificate application cannot reopen the original decision that property, including a gift, was realisable property. The discretion to disregard inadequacy under section 83(2)(b) arises only after inadequacy has been established.

The applicant had been convicted of cigarette smuggling and made subject to a confiscation order under Part VI of the Criminal Justice Act 1988. The order was later reduced after the equity in a former partner’s home was held to include a smaller gift caught by the Act. The applicant applied to the High Court for a certificate of inadequacy under section 83, relying on the lower surrender value of an insurance policy and his inability to realise the remaining equity. The central issues were whether the realisable property was inadequate and whether any inadequacy should be disregarded under section 83(2)(b).

Application dismissed. The applicant had not established the statutory conditions for a certificate of inadequacy.

1. Section 83(1) requires a present factual inquiry into the value of the defendant’s realisable property. The court must first decide whether that property is inadequate to meet the amount outstanding. Only if that threshold is met does the court reach the discretion under section 83(2)(b).
2. The lower surrender value of the Abbey Life policy could not, by itself, establish inadequacy. Even allowing for that shortfall and the estimated interest, the unpaid amount remained below the £18,933.50 portion of the Queens Road equity which had been held to be a gift caught by Part VI and therefore realisable property.
3. The fact that the applicant did not control the Queens Road property, and might be unable practically to realise it, did not remove it from the statutory concept of realisable property. The approach in R v Liverpool Magistrates Court, ex p Ansen [1998] 1 All ER 692 showed that deemed property exceeding the unpaid sum prevents the statutory threshold from being met.
4. The application could not be used to challenge the original findings that the equity was a gift caught by the Act or that it was realisable property. Such challenges had to be pursued by appeal. The authorities, including Gokal v Serious Fraud Office [2001] EWCA Civ 368, treated an attempt to go behind the confiscation order as improper.
5. Re May Yoong Forwell [2003] EWCA Civ 1608 did not assist. That decision concerned post-order changes, including dissipation of gifted funds after the confiscation order. Here there was no demonstrated change in the value or position of the equity deemed realisable. Section 83(1) was therefore not engaged, and the application was dismissed.