Hansford v Southampton Magistrates' Court

Under Criminal Justice Act 1988, a receiver must pay realised proceeds towards a confiscation order as soon as they are received, subject only to payments authorised by an effective court direction. A direction conditional on High Court approval does not authorise retention or deduction before that approval is obtained. The statutory scheme does not permit payment to be deferred for a reasonable time. Interest under section 75A(1) is an automatic consequence of unpaid sums. The court has no discretion to vary the period or rate of interest, or to dispense with interest. Section 3 of the Human Rights Act 1998 cannot be used to legislate by adding such a discretion.

The claimant had been convicted of conspiracy to cheat HM Revenue and Customs and became subject to a confiscation order. A receiver realised property but retained substantial sums for fees and disbursements. The magistrates’ court later enforced the unpaid confiscation order, added statutory interest and committed the claimant to prison for default.

The district judge stated a case to the Divisional Court. The issues were whether the receiver could retain realisation proceeds pending approval of his fees, and whether the court had discretion under section 75A(1) of the Criminal Justice Act 1988 to vary or dispense with statutory interest.

1. Retention of fees. Section 81(1) requires proceeds of realisation in the receiver’s hands to be applied towards the confiscation order, after any payments directed by the High Court. The High Court has power to direct that a receiver’s remuneration and disbursements be paid from the proceeds before the balance is applied. This accords with In the Matter of HN and others [2005] EWHC 2982 (Admin) and Re Brian Roger Allen [2003] EWCA Civ 1168.

2. Where the direction is conditional on High Court approval, it is ineffective until that condition is satisfied. The receiver cannot retain the proceeds pending approval or defer payment for a reasonable time. He must pay them forthwith, less only payments authorised when the proceeds come into his hands. This construction avoids uncertainty and prevents the defendant’s custodial default term and interest liability from being increased by delay.

3. The receivership order incorporated an arrangement requiring High Court approval before remuneration could be drawn. Approval had not been obtained when the proceeds were realised. The receiver was therefore not entitled to withhold them before the enforcement hearing.

4. Interest. Section 75A(1) imposes an automatic liability to pay interest on sums unpaid when due, at the rate prescribed by section 75A(3). Section 75A(1) and (3) prescribe consequences of a confiscation order, whereas section 75A(2) expressly gives the court a discretion to increase the default term. The contrast shows that Parliament intended no judicial discretion over the period or rate of interest.

5. Section 3 of the Human Rights Act 1998 does not permit the court to add a discretion which Parliament deliberately omitted. The two questions of law were answered accordingly.

• High Court (Administrative Court): the district judge stated a case on questions concerning the receiver’s fees and statutory interest. The Divisional Court answered that the proceeds had to be paid forthwith, subject to authorised payments, and that the court had no discretion to vary the statutory interest obligation.