Crown Prosecution Service v Lawrence

In enforcement proceedings under the Drug Trafficking Act 1994, the registered proprietor of property is presumed to hold the beneficial interest, but the prosecutor may rebut that presumption on the balance of probabilities. The court may determine beneficial ownership by drawing inferences from the whole circumstantial evidence, including the source of purchase funds, control of renovations, occupation, financial records, inconsistencies in evidence and concealed relationships. A third party who was not involved in the confiscation proceedings must nevertheless receive a proper hearing before property is brought within enforcement proceedings. Where the statutory conditions for an enforcement receiver are met, the court should make the order subject to determination of any genuine third-party interests.

Mark Liscott was convicted of supplying cannabis and became subject to a confiscation order of £2 million under the Drug Trafficking Act 1994. The confiscation order identified 2 Scarsdale Road as beneficially owned by him, although the property was registered in the name of Laurence Lawrence.

The Crown Prosecution Service applied for an enforcement receiver and a declaration that Liscott owned the beneficial interest. Lawrence, who had not been a party to the confiscation proceedings, contested the application and asserted that he was the true owner. The central issue was whether the registration in his name represented the true beneficial ownership.

1. The statutory preconditions for appointing an enforcement receiver under section 29(1) of the Drug Trafficking Act 1994 were satisfied: the confiscation order had been made, remained unsatisfied and was not subject to appeal. Subject to third-party claims, an enforcement order should be made having regard to section 31(2).

2. Although Lawrence was not a party to the confiscation proceedings, he was entitled to a proper hearing before a receiver was appointed over property in which he claimed an interest. Sections 29(8) and 31(4) expressly protected innocent third parties and permitted them to retain property which was neither the proceeds of the defendant’s crime nor a gift caught by the Act.

3. The ordinary starting point was that the registered proprietor held the beneficial interest. The prosecutor therefore bore the burden of proving otherwise on the balance of probabilities, consistently with the approach identified in Stack v Dowden [2007] 2 A.C 432.

4. That burden was discharged. The court rejected Lawrence’s evidence concerning the purchase, deposit, inheritance, renovation payments, mortgage payments and alleged tenancy. His lack of independent means, changing accounts, absence of supporting financial documents and failure to call material witnesses were significant. The defendant’s conduct was also compelling circumstantial evidence, including his involvement in renovations, registration at the property, purchase of goods for it and close links with Lawrence.

5. Considering the evidence in the round, the court found that registration in Lawrence’s name was a sham designed to conceal that Liscott’s money had funded the purchase. Liscott was the true beneficial owner. The order sought by the prosecutor was to be made, subject to submissions on its form.

• Birmingham Crown Court: Liscott pleaded guilty to supplying cannabis. A confiscation order of £2 million was made on 13 December 2005, including a finding that he beneficially owned 2 Scarsdale Road.
• High Court (Administrative Court): The Crown Prosecution Service applied under the Drug Trafficking Act 1994 for an enforcement receiver and a declaration of beneficial ownership. The application succeeded.