O'Keefe v Austin

Where a third party seeks release of restrained property to fund legal representation after a confiscation order, the court must give substantial weight to the statutory objective of preserving assets for enforcement. At the post-confiscation stage, release requires very strong reasons. The fact that the property is the applicant’s home is not, without more, decisive. The statutory scheme does not require private release of restrained assets before public funding is considered. If the court refuses release, the Legal Aid Agency may be able to disregard the restrained asset when assessing disposable capital, and exceptional case funding may address Convention rights.

The applicant was a third party in ongoing High Court receivership proceedings concerning assets restrained to satisfy a confiscation order made against the defendant. The restraint order included the applicant’s home, in which he claimed legal and beneficial ownership.

He sought discharge or variation of the order to obtain a loan secured on the property for legal expenses. Alternatively, he sought a decision enabling a fresh application for legal aid. The Crown opposed release, relying on the statutory objective of preserving assets for confiscation. The central issue was whether the circumstances supplied sufficiently strong reasons to displace that objective.

1. Application dismissed. The court refused to discharge or vary the restraint order in respect of the N14 property. Costs were reserved, and an expedited transcript was ordered to assist any fresh legal-aid application.
2. Because the offences pre-dated 24 March 2003, the Criminal Justice Act 1988, rather than the Proceeds of Crime Act 2002, applied. Sections 77 and 82 empowered the High Court to restrain realisable property, subject to provision for living and legal expenses, while directing that assets remain available to satisfy the confiscation order.
3. The court followed the approach in Re D [2006] EWHC 1519 Admin, as applied in Re S [2010] EWHC 917 Admin. At the post-confiscation stage, the statutory objective assumed substantially greater importance. A third party seeking to fund litigation from property claimed by that third party must show very strong reasons for release.
4. The applicant’s home ownership, the length of the restraint, the complexity of the receivership proceedings and the asserted inequality of arms did not displace that statutory objective. There was no principled basis for releasing even the asserted £175,000 of legitimate funds before the receivership court determined the ownership and tracing issues.
5. The legal-aid scheme provided an alternative route. Regulation 43 of the Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013 permitted restrained assets to be disregarded after the court had refused release. Exceptional case funding under section 10(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 could address any Convention-rights difficulty. The Legal Aid Agency remained required to act within the statutory scheme and public-law principles, including consideration of Articles 6 and 8 of the Convention.
6. The court did not determine the merits of the applicant’s claim to the property. It observed that the legislative steer did not necessarily require consideration of those merits at the restraint stage.

This was an interim application in ongoing High Court receivership proceedings. The restraint order had been made in 2010, varied in 2011 and 2013, and followed by a confiscation order in the Crown Court in 2016. The present court refused the requested variation or discharge.