CRIME ??? Proceeds of crime ??? Recovery of assets ??? Defendant convicted of conspiracy to launder proceeds of crime ??? Court issuing receivership order addressed to defendant and ???all other persons having possession of??? defendant???s property ??? Receiver obtaining writ of possession addressed to defendant and ???all other persons??? at property ??? Property occupied by tenants protected by contract and/or statute ??? Whether court???s statutory power to order ???any person having possession of realisable property??? to give possession to receiver including power to issue order against tenants whose interests undetermined by court order.

QBD: James Goudie QC: 13 November 2009

The court???s power under s 80(4) of the Criminal Justice Act 1988 (now repealed) to order ???any person having possession of realisable property??? to give possession to a receiver did not empower the court to make such an order against tenants protected by contract and/or statute whose interests had not been determined by a court order.

James Goudie QC so held in the Administrative Court of the Queen???s Bench Division when (1) granting the application in part of the first third party, A, for (i) the variation of the terms of a receivership order made in November 2008 appointing the claimant, B, a receiver over the property of the defendant, N, (ii) the setting aside of the writ of possession granted to the claimant in September 2009; and (iii) a stay of enforcement of the writ of possession; and (2) granting the application of the second third party, S, for the suspension of the writ of possession.

The defendant was convicted in 2003 of conspiracy to launder the proceeds of crime. A restraint order was made against her forbidding her from disposing of or dealing with or diminishing the value of the property. A room together with shared use of a bathroom and a kitchen at the property was let to A on an assured shorthold tenancy. His tenancy, which had first been granted in 2007, was due to expire by effluxion of time on Christmas Day 2009 after which his tenancy would become a statutory tenancy under the Housing Act 1988. He could not be evicted without a court order. S occupied a self-contained flat at the property on the basis of an unwritten weekly periodic tenancy. Both tenancies were granted in breach of the restraint order to which the defendant was subject. In April 2008 a confiscation order was made against the defendant in the amount of £778,550. By an order granted in November 2008 without notice having been given to the tenants, the claimant was appointed receiver under the Criminal Justice Act 1988 to enforce the confiscation order The receivership order required the defendant and ???all persons having possession of??? the defendant???s realisable property to deliver up to the receiver possession of all realisable property expressed to include 100% of the net proceeds of sale of the property. The receivership order was notified to the tenants in August 2008. In September 2009, without notice being given to the tenants, the claimant obtained a writ of possession in respect of the property which was addressed to the defendant and ???all other persons??? at the property. The receiver stated that she believed that only the defendant and her family lived there. None of the tenants were offered the value of their respective property interests.

JAMES GOUDIE QC said that the tenants should have been given notice of the applications for the receivership order and the writ of possession. Furthermore whilst the court was empowered by s 80(4) of the Criminal Justice Act 1988 to ???order any person having possession of realisable property to give possession of it to any such receiver??? that power was exercisable ???with a view to allowing any persons other than the defendant ... to retain or recover the value of any property held by him??? pursuant to s 82(4). The term ???any person??? in s 80(4) did not include tenants protected by contract and/or under statute. Much clearer language would be needed to expropriate a property right and to do so without compensation. The general scheme of the confiscation legislation was not to infringe property rights of parties who might themselves be entirely innocent. The receivership order was therefore varied so that it was addressed to the defendant and all persons having possession of the defendant???s realisable property who did not themselves have a subsisting interest in such property, subsisting interests to include a tenancy which had not been determined by court order. The writ of possession against A and S would be suspended until county court orders for possession had come into force.

Appearances: Clara Johnson (instructed by Moon Beever Solicitors) for the claimant; Jamie Burton (instructed by Mary Ward Legal Centre) for A; S appeared in person. The defendant did not appear and was not represented.

Reported by: Jessica Giles, solicitor