Practice and Procedure

CROWN PROSECUTION SERVICE (Claimant) v (1) ALEEM MALIK (Defendant) (2) BABITA MALIK (Third Party) (2003)

PUBLISHED April 28, 2003

A transfer of freehold property for nil consideration between the defendant and the third party gave rise, in the absence of a bare trust in favour of the third party, to a "gift" for the purposes of the Drug Trafficking Act 1994, and the claimant was entitled to a receivership order in respect of the property.Applications by the claimant ('CPS') and the third party ('TP') as to their respective rights in relation to a freehold property, which had allegedly been the subject of a gift by the defendant ('D') to TP. TP was D's sister. D had originally bought the property (jointly with his brother) from his mother for ?35,000 in 1986. In 1997, D, who had by then been the sole owner for some years, transferred the property to TP for no consideration. In 1999, D was sentenced to a term of 11 years' imprisonment following conviction for conspiracy to supply a controlled Class A drug. A confiscation order was made against D in the sum of £90,000. In 2000, a restraint order was made prohibiting the disposal of D's assets, including the property. TP applied to have that order varied so as to exclude the property from it. The CPS then applied for a receivership order against D. In view of TP's pending application, the receivership order as made excluded the property but made provision for the issue of whether the property should be included in it to be considered at a later date. The CPS now cross-applied for a variation of the receivership order so as to include the property. The issue at the heart of both applications was whether, in transferring the property to TP, D had made a "gift" within s.8 Drug Trafficking Act 1994, so that it fell within the definition of "realisable property" in s.7(2) of the Act and could be the subject of a restraint order and a receivership order. D and TP claimed that D had at all relevant times held the property on bare trust for TP.HELD: (1) There could be no doubt that D had transferred the property to TP for a value significantly less than the consideration he had paid for it. (2) Having reviewed all the evidence, the court was satisfied that D (jointly with his brother for part of the period between 1986 and 1997) had been the beneficial owner of the property. One of the purposes of the sale by the mother was to generate cash for the family business by way of a mortgage on the property, and at that time it was more convenient that D (and his brother) should have beneficial ownership. (3) It followed that D's transfer to TP involved a transfer of the legal title and the beneficial interest in the property by way of gift. TP's application therefore failed, whilst the application by the CPS succeeded.CPS's application allowed. TP's application dismissed.

[2003] EWHC 600 (Admin)