Hackett v Crown Prosecution Service & Anor

A third party may assert an interest in property subject to confiscation proceedings, and the court may determine that claim when considering an enforcement receivership application.

Presumed undue influence arises where a relationship of influence exists and the transaction calls for explanation. The evidential burden then shifts to the party seeking to uphold the transaction to show that it resulted from the donor’s full, free and informed thought, independently of the influence exercised or available. Independent legal advice is relevant but not decisive. Advice must address the relevant circumstances and enable an informed, independent choice.

A claim of non est factum carries a heavy burden, including proof that reasonable precautions were taken.

The claimant, an elderly deaf and illiterate woman, sought to set aside her transfer of a house to her son for no consideration. The transfer had been made after the son became subject to criminal confiscation proceedings, and the Crown Prosecution Service sought an enforcement receiver over the property.

The claimant relied on presumed undue influence and non est factum. The CPS disputed the claim and maintained that the house had been acquired with the son’s criminal proceeds. The central issues were the source of the purchase money, whether the transfer was procured by presumed undue influence, and whether the claimant understood the document she signed.

1. Jurisdiction and source of funds. The court had jurisdiction to consider the claimant’s interest in property treated as the defendant’s realisable property. The evidence established that the purchase money came from savings accumulated by the claimant’s late husband, not from the defendant’s criminal activities. The confiscation assumptions did not determine the issue in this application.
2. Presumed undue influence. The relationship between the claimant and her son was one of presumed influence. This followed from the power of attorney, the claimant’s reliance on her son, and her deafness, illiteracy and limited education. The transfer of her sole major asset to the son for no consideration plainly called for explanation.
3. The CPS therefore had to show that the claimant made the transfer as a result of full, free and informed thought, independently of the influence which the son was in a position to exercise. It was insufficient to show a reasonable explanation, absence of manifest disadvantage, or that the son had not acted dishonestly. Undue influence is concerned with the effect of the relationship and the lack of independent decision-making.
4. The solicitor’s involvement did not rebut the presumption. He acted for both parties, saw the claimant only in the son’s presence, had to communicate through him, lacked knowledge of several material circumstances, and was not satisfied that the claimant was fully capable of making the decision. The claimant could not read the written advice, and there was no reliable evidence that its contents were explained to her in an independent and comprehensible manner. The CPS failed to discharge its burden.
5. Non est factum. The claim was academic because the transfer was set aside for undue influence. In any event, the claimant failed to prove what she believed she was signing and failed to establish that she had taken all reasonable precautions. That claim therefore failed.
6. The claim based on presumed undue influence succeeded. The claim based on non est factum failed.

The defendant was made subject to a confiscation order under the Criminal Justice Act 1988 on 4 May 2007. An appeal against that confiscation order was dismissed by the Court of Appeal (Criminal Division) on 17 October 2007. The present application was a first-instance determination of the claimant’s property claim and the CPS’s enforcement receivership application.