GN v Sevenoaks Borough Council (HB)

Under the heading “Effect of this Order” was added:

“A defendant who is ordered not to do something must not do it himself or in any other way. He must not do it through others acting on his behalf or on his instructions or with his encouragement.”

On 12^th January 2001 an inhibition was added to the Land Registry Proprietorship Register in the following terms:

“Pursuant to a restraint order made under the Drug Trafficking Act 1994 on 8^th January 2001 no disposition or other dealing by the proprietor of the land is to be registered without the consent of any prosecutor acting on behalf of the Crown or under a further order of the Court or of the registrar.”

On 15^th October 2002 and 5^th March 2003 or 2004 (the information that I have is inconsistent) the Court of Appeal dismissed the claimant’s appeal against conviction but allowed his appeal against sentence, which was reduced to imprisonment for six years. On 14^th July 2004 the Crown Court issued a confiscation order to the claimant under the Drug Trafficking Act 1994 requiring him to pay £76,934 within six months, with two years imprisonment in default, although the amount would still remain payable. (This amount was later increased to reflect the fact that the claimant had received a legacy from his father’s estate, but that does not really effect the present appeal). There was in fact a delay in enforcement because of some confusion over the appeal process. Meanwhile, on 12^th November 2006 the claimant was charged with a separate offence of conspiracy to supply cocaine and was remanded in custody on this charge. On 15^th November 2007, having pleaded guilty, he was sentenced by the Crown Court to imprisonment for 10 years and six months. He did not appeal against this.

On 29^th November 2007, in the High Court, Mr Justice Collins appointed a receiver over the claimant’s assets to enforce the confiscation order (sometimes referred to as an “enforcement receiver”). The schedule of property included the claimant’s half share in the equity of number 46. The claimant was ordered to deliver up to the receiver forthwith possession of his assets including relevant documentation and to take such steps as may be required by the receiver to enable the receivership to be conducted and the sale of the assets to proceed. Any disobedience to the order “may be held to be in contempt of court and [you] may be imprisoned, fines or have your assets seized”. The order also included the following:

“The receiver shall have the following powers without prejudice to the existing powers vested in him by statute or otherwise:-

(a)

Power to sell the defendant’s assets,

(b)

…

(c)

Power to take possession and realise the property known as [number 46] held in the name of [the claimant] by the sale of the legal and beneficial interest therein in the name of and on behalf of the [claimant].

(d)

Power to execute all such documents in the name of and on behalf of the [claimant] as may be necessary to realise the property at [number 46] and to transfer or convey the legal and beneficial interest in the said property to the purchaser thereof.

…

On 19^th March 2010 the appropriate forms were completed to transfer the ownership of number 46 to a purchaser who is in fact the claimant’s son (although the purchaser did not live at number 46 during any relevant period). The transferor is shown as the claimant “acting by” the enforcement receiver. The space for the signature shows that the document is to be signed both by the claimant and the enforcement receiver, although the copy that I have seen (page 141 of the Upper Tribunal file) was signed only by the receiver. The Land Registry Proprietorship Register shows the transfer as having taken place on 24^th March 2010. On 29^th November 2010 the High Court ordered the discharge from office of the receiver because the claimant’s assets had been realised and the confiscation order satisfied in full on 30^th June 2010.

In March 2012 the claimant was released from prison and initially lived elsewhere but on 21^st December 2012 he moved back into number 46, signing an assured shorthold tenancy agreement with the son who was now the owner. On 30^th December 2012 and 1^st March 2013 he claimed housing benefit in respect of this tenancy. On 22^nd April 2013 the respondent local authority refused to award benefit and on 30^th April 2013 the claimant appealed to the First-tier Tribunal against that decision. The First-tier Tribunal finally considered the matter on 13^th February 2014 and confirmed the decision of the local authority. On 28^th November 2014 a judge of the First-tier Tribunal refused the claimant permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal. He now appeals by my permission given on 9^th March 2015. On 9^th October 2015 I directed that there be an oral hearing of the appeal, and this took place on 7^th June 2016. The local authority opposes the appeal and supports the decision of the First-tier Tribunal. It is unfortunate that because of various delays it is now well over three years since the creation of the tenancy and the claim for benefit was made.

The First-tier Tribunal found that the claimant “was the registered legal owner” of number 46 until 24^th March 2010. This was less than five years prior to the claim for housing benefit and therefore, on the basis of the provisions of regulation 9(1)(h) he was not entitled to housing benefit. The First-tier Tribunal’s decision and statement of reasons made no reference to the definition of “owner” in regulation 2(1).

Mr Rutledge took me through the relevant provisions of the main legislation relating to real property and registered land, and the legislative background to the restraint and confiscation orders but it is not necessary for me to recount any of that here. It is clear that the fee simple in number 46 was included in the High Court restraint order, the Land Registry inhibition and the High Court’s appointment of a receiver to enforce the Crown Court confiscation order.

Mr Rutledge also referred to a number of authorities where similar issues had come up, for example in relation to the calculation of capital and what was included as assets for the purposes of a restraint order. I do not need to go through these in this decision because there can be no doubt that the claimant’s interest in number 46 was covered by the restraint order.

The local authority argued that if the claimant could have satisfied the confiscation order from other resources, then the Land Registry inhibition would have been removed and the property (number 46) would be his. It also relied on the fact that the transfer was in the claimant’s name.

However, the key point in this case is the definition in regulation 1(2). The “owner” is the person who for the time being is entitled to dispose of the fee simple. It is absolutely clear that from the time of issue of the restraint order by Mr Justice Ouseley in the High Court on 8^th January 2001 this was not the claimant, and there would have been severe legal consequences had he attempted to dispose of the fee simple. What might have happened had the facts been other than they were is not relevant. Neither the local authority nor the First-tier Tribunal ever got to grips with the implications for this case of the definition in regulation 1(2).

The claimant did not in fact sign the transfer, nor was there any need for him to do so. As detailed above, the terms of the appointment of the enforcement receiver by Mr Justice Collins, in the High Court on 29^th November 2007 gave the receiver all the necessary powers.

For the above reasons I find that the decision of the First-tier Tribunal was made in error of law. The claimant did not own number 46 within the meaning of the regulations as from 8^th January 2001 because he could not (lawfully) dispose of the fee simple, and therefore when he claimed housing benefit at the end of 2012 in respect of his tenancy of number 46 he had not owned the premises or property within the previous five years. Accordingly, this appeal by the claimant succeeds.