Smith, Re (Ruling - Piggott condition)

The court has jurisdiction under section 37 and the 1988 Act to appoint enforcement receivers over property which is disputed, provided there is a good arguable case that it is realisable property. That construction is available even where receivership involves realisation, because the statutory scheme is intended to preserve assets pending resolution of the dispute. On realisation, section 81(1) permits the court to direct that proceeds be retained separately rather than immediately applied towards the confiscation order. The proceeds may therefore be held in a separate account until ownership or realisability is determined.

The ruling concerned the jurisdiction to make receivership and restraint orders in confiscation proceedings where there was a dispute about whether property constituted realisable property. The principal issues were whether jurisdiction existed under section 37 and the 1988 Act, and whether section 81(1) required realised proceeds to be immediately applied towards the confiscation order.

1. Mr Justice Popplewell held that jurisdiction existed under section 37 and the 1988 Act. The expression realisable property in sections 77 and 80 included property subject to a dispute where there was a good arguable case that it was realisable property.

2. This construction was necessary to fulfil the statutory purpose of preserving assets before the dispute was resolved. Although that rationale would not apply to restraint involving preservation alone, the jurisdiction had to cover cases in which preservation required realisation. The court was fortified by the Court of Appeal decision in Piggott, which bound it.

3. Section 81(1) did not prevent an order under section 77 or section 80 in respect of disputed property. The proviso allowing the High Court to direct payments out of realised sums enabled the court to order that proceeds should not be applied towards the confiscation order until the dispute had been resolved.

4. The enforcement receivers could retain the proceeds pending that event. In practice, the proceeds could be paid into a separate account so that they remained identifiable. That was a sensible construction of section 81(1) and gave effect to the statutory scheme.

5. The court therefore held that jurisdiction existed under both section 37 and the 1988 Act.