Proudlock (designated officer for Sunderland Magistrates’ Court) v Krager and another

Civil procedure – Charging order made over property by way of civil enforcement of crown court confiscation order against first defendant – Property held in second defendant’s sole name but first defendant alleged to hold beneficial interest – Whether confiscation order enforceable by charging order route where property enforced against shared with third party – Section 87(1) of Magistrates Court Act 1980 – Whether claimant having locus standi to apply for declaratory relief – Application dismissed. Following his conviction for offences under the Trade Marks Act 1994, a confiscation order was made against the first defendant in the crown court. By way of enforcement of that order, a final charging order was granted in the county court in favour of K, an authorised assistant to Leeds magistrates’ court, which was mistakenly believed to be the magistrates’ court responsible for enforcement of the confiscation order. The claimant, as the designated officer for Sunderland magistrates’ court, subsequently brought proceedings in the High Court to enforce the charging order against a beneficial interest that the first defendant was alleged to have in a property in Sunderland. The second defendant, as the sole registered proprietor, denied that the first defendant had any interest in the property. The claimant applied for declaratory relief, under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, as to the defendants’ beneficial interests in the property. The second defendant contended that the confiscation order was not enforceable in either the county courts or the High Court since, on the proper application of section 35 of the Proceeds of Crime Act 2002 (POCA) and section 87 of the Magistrates’ Court Act 1980, the enforcement of a confiscation order lay within the exclusive jurisdiction of the crown court. In the alternative, she submitted that even if confiscation orders were enforceable generally in the High Court, an exception should be recognised where enforcement was sought against property shared with a third party, confining enforcement in such cases to the receivership route under section 50 of POCA, in order to protect the rights and interests of those third parties. The second defendant further disputed the claimant’s entitlement to locus standi to make the application where the charging order had been made in the name of K and the claimant did not have the benefit of that order or any other interest in the property. Those matters were determined as preliminary issues. Held: The claim was dismissed.    (1) There was no binding authority for the proposition that the crown court had exclusive jurisdiction in relation to all aspects of the enforcement of confiscation orders: Webber v Webber (Crown Prosecution Service intervening) [2007] 1 WLR 1052 distinguished. The statutory structure afforded an enforcement route by the obtaining of charging orders on a defendant’s property, by means of treating the confiscation order as a quasi civil judgment debt. By section 35 of the POCA, the confiscation order was deemed to be a fine imposed by the crown court. Next, the Sentencing Act 2002 deemed the crown court fine to have been imposed on conviction by the magistrates’ court that committed the first defendant to the crown court for trial. Finally, section 87(1) of the 1980 Act converted the deemed magistrates’ court fine arising from the crown court confiscation order into a High Court or county court judgment debt for the purposes of civil enforcement.   There was no reason to make an exception where the confiscation order was sought to be enforced against property in which a third party held an interest. Nothing in the language of section 50 of POCA suggested that the receivership route was intended to be the exclusive means of enforcement of a confiscation order, either generally or in relation to any specific type of property. The rights of third parties were still protected where the civil enforcement route of obtaining and enforcing a charging order was taken. Third parties with an interest in the property enforced against were entitled to be notified as part of the procedure for making an interim charging order final. The second defendant, although notified, had not chosen to intervene in the charging order application so as to assert that the first defendant had no interest in the property. In addition, the final charging order would affect only the first defendant’s unspecified interest in the property and the beneficiary of that order would have to establish, in any proceedings to enforce it by way of sale, that the first defendant held a sufficient beneficial interest to justify such a sale. The second defendant’s challenge based on jurisdiction therefore failed.   (2) However, the claimant lacked locus standi to bring the instant application. She was not a person with an interest in the property, for the purposes of section 14 of the 1996 Act, since she was not the person who had applied for it or to whom it had been granted. It would be inappropriate to vary the charging order under the slip rule where the evidence in support of the application for the charging order in Leeds County Court had identified K, not the claimant, as the applicant and intended recipient of the order. Jonathan Hall (instructed by the Treasury Solicitor) appeared for the claimant; Stephen Fletcher (instructed by David gray Solicitors) appeared for the second defendant; the first defendant did not appear and was not represented. Sally Dobson, barrister