Telli v Revenue and Customs Prosecutions Office

Under the statutory scheme for confiscation orders, the amount recoverable is ordinarily the full value of the defendant’s proceeds of drug trafficking. A lesser amount may be ordered only where the court is satisfied that the total value of all realisable property held by the defendant is lower. An agreement cannot authorise an order inconsistent with that scheme. Where unidentified assets formed part of the realisable property at the date of the order, an applicant for a certificate of inadequacy must establish the current value of all realisable property. The loss or unavailability of an identified asset does not by itself establish inadequacy while other assets remain unidentified.

The appellant had completed the custodial term imposed for drug-trafficking offences but remained imprisoned under a default term for failing to pay the balance of a confiscation order for £3,458,806. The order followed an agreement between the prosecution and the appellant. A certificate under the Drug Trafficking Act 1994 stated that his proceeds were £6 million and that £3,458,806 was the amount that might be realised.

The appellant applied under section 17 after a statue of Dionysus, treated as part of the relevant property, was repatriated by Turkey. Collins J refused a certificate of inadequacy: [2006] EWHC 2233 (Admin). The central issue was whether the statue’s unavailability demonstrated that the realisable property was inadequate, or whether unidentified assets included in the original assessment had to be taken into account.

1. Appeal dismissed. The appellant could not establish that his realisable property was currently inadequate to meet the outstanding balance.
2. The statutory scheme distinguished between assessing the proceeds of drug trafficking and assessing the amount that might be realised. Under sections 4 to 7 of the Drug Trafficking Act 1994, the Crown Court had to order recovery of the full value of the proceeds unless it was satisfied that the value of all realisable property held by the defendant was lower. The defendant bore the practical burden of identifying the property necessary to establish that proposition.
3. An agreement between the prosecution and defendant could settle matters forming the foundation of a confiscation order, but it could not confer authority inconsistent with the court’s statutory obligations. The Crown Court’s certificate nevertheless recorded a conclusion that the realisable amount was less than the proceeds. That conclusion could not be overturned or unravelled on this application.
4. For section 17, the High Court had to assess the current value of the realisable property. The certificate showed that the original total included not only identified assets but also assets that the appellant had hidden and failed to identify. Their current value was therefore unknown. The repatriation of the statue did not demonstrate that the remaining realisable property was inadequate.
5. The approach was consistent with R v Dickens [1990) 2AB 102, Re McKinsley [2006] EWCA Civ 1092, In the Matter of Keith James O’Donoghue [2004] EWCA Civ 1800 and Gokal v Serious Fraud Office [2001] EWCA Civ 368.
6. Collins J had erred in relying on the agreement as the basis for his reasoning, but his conclusion was correct. Moore-Bick and Ward LJJ agreed with Moses LJ.

• Court of Appeal (Civil Division): appeal from Collins J’s decision in the Queen’s Bench Division, Administrative Court, refusing a certificate of inadequacy. The appeal was dismissed.
• Queen’s Bench Division, Administrative Court: Collins J refused the application for a certificate of inadequacy, [2006] EWHC 2233 (Admin).