Adams v Crown Prosecution Service (CPS)

On an application under section 83(1) of the Criminal Justice Act 1988, the defendant must prove that his realisable property at the date of the application is inadequate to meet the outstanding confiscation order. The court may consider all relevant evidence about his present assets.

An agreed valuation at the confiscation hearing does not prevent consideration of assets which were then successfully concealed but are now available. The prosecution need not prove when or how a suspected undisclosed reserve was acquired. Unexplained funds, spending, cash transactions and intertwined family finances may support an inference that the defendant has not made full disclosure or discharged the burden of proof.

Mr Adams was subject to a £750,000 confiscation order, of which approximately £365,000 had been paid. He applied to the High Court for a certificate under section 83(1) of the Criminal Justice Act 1988, asserting that all his assets had been realised and that his realisable property was inadequate to meet the outstanding balance.

Nicola Davies J refused the application in [2014] EWHC 2639 (Admin). She was not satisfied that Mr Adams had made full and candid disclosure and found that the evidence indicated an undisclosed reserve of funds. He appealed, principally arguing that the prosecution had impermissibly gone behind the agreed valuation made when the confiscation order was imposed and that the judge's findings were unreasonable.

The central issues were whether previously concealed assets could be considered on a section 83 application, whether the prosecution had to identify when or how an undisclosed reserve was acquired, and whether the evidence supported the judge's conclusions.

Appeal dismissed. Hamblen LJ delivered the judgment, with which Irwin and Longmore LJJ agreed.

1. Section 83(1) of the Criminal Justice Act 1988 places the legal and evidential burden on the defendant. The relevant question is whether the defendant's realisable property at the date of the application is inadequate to pay the outstanding amount. The confiscation order is the starting point, and clear and cogent evidence will generally be required.

2. The principle that a section 83 application cannot be used to challenge findings made at the confiscation hearing did not determine this case. The agreed £750,000 valuation contained no finding or agreement that Mr Adams had no hidden assets. The prosecution neither alleged nor needed to prove that the Crown Court had valued his assets incorrectly.

3. The court need not ignore assets successfully concealed when the confiscation order was made but available when the certificate application is determined. That result would frustrate the statutory purpose of depriving defendants of the proceeds of crime. In re McKinsley [2006] EWCA Civ 1092 prevented an applicant from going behind the original findings; it did not prevent the prosecution from relying on assets currently held by the applicant merely because they might previously have been secreted.

4. The High Court's inquiry was not confined to specified categories of assets or evidence. The prosecution could contend that Mr Adams had an undisclosed reserve without proving when or how it was acquired. The burden remained on him to establish inadequacy.

5. The judge was entitled to infer an undisclosed source of funds from the cumulative evidence. That evidence included implausible employment and business arrangements, unexplained loans and investments, extensive cash expenditure, an expensive lifestyle after known funds had been exhausted, and the intertwined financial affairs of Mr and Mrs Adams. The absence of a satisfactory explanation for the sources of money was material.

6. The findings disclosed no error of law and were neither unreasonable nor against the weight of the evidence. Mr Adams had therefore failed to prove that his realisable property was inadequate to meet the outstanding confiscation order.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously: [2017] EWCA Civ 185.
2. High Court, Queen's Bench Division (Administrative Court): Nicola Davies J refused to issue a certificate of inadequacy under section 83(1) of the Criminal Justice Act 1988: [2014] EWHC 2639 (Admin).