Proceeds of Crime Bill

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Mr. Grieve: I am grateful to the Minister for his clear exposition of the clause. I apologise again to the Committee. I now have the opportunity to reread the provision, instead of moving rapidly from one amendment to another. Perhaps when I drafted the amendment, at 1 o'clock in the morning or whenever it was, I considered tinkering with both subsections (2) and (3). I appreciate that the earlier amendment that I did not move could have been made to subsection (2) in order to achieve a similar impact to the one that I

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hoped to achieve in subsection (3). A general point is involved that, in a funny way, applies to either; we might consider it.

I realise that the purpose of the clause is to provide a measure of relief in cases in which the court decides that an interim receiving order should be varied so as to exclude property, especially associated property. As the Minister is aware, that takes us back to our discussion of a few minutes ago.

Under subsection (2), the varying of an interim receiving order

    ''so as to exclude from the property to which the order applies any property which is alleged to be associated property''

is not based on whether the court believes that it is just to do so but gives primacy to not prejudicing the enforcement authority's ability to recover the property. In a sense, we are duplicating our earlier discussion.

Under subsection (3), on the other hand,

    ''The court may exclude property within subsection (2) on any terms or conditions, applying while the interim receiving order has effect, which the court thinks necessary or expedient.''

That is the point at which I tried to tinker with the provision. Although I developed the argument in relation to the wrong amendment a few minutes ago, the amendment that I developed to subsection (3) was the better of the two amendments and better than messing around with subsection (2). Subsection (3) defines the basis on which subsection (2) should operate.

I simply voice that anxiety. I certainly will not resist the incorporation of the clause into the Bill, but I ask the Minister to consider carefully, especially in relation to subsection (3), whether the words ''necessary or expedient'' are correct, for the reasons that I explained in my failed argument a few minutes ago.

The court should decide to exclude property on the basis of justice between the parties, especially in relation to the party who has an interest in associated property that may be prejudiced. I do not know whether the Minister and his draftsman can do that, but I ask him to consider the matter.

Mr. Ainsworth: I do not know whether the hon. Gentleman has considered that some of the amendments with which he has been tinkering might have an effect that he does not necessarily intend. Perhaps he will reflect on that, and I shall reflect on his point.

We are dealing with property that is still in dispute. Some of the suggestions that the hon. Gentleman makes might remove the requirement to continue to consider the director's or enforcement authority's right in that dispute. The hon. Gentleman may be thinking of individuals who own associated property and who are not willing to co-operate in the proceedings and he may be thinking that, despite that lack of co-operation, they should have the ability to unfreeze the property to their benefit. I am not dead sure that that is what he wants to achieve, but I shall look into the matter with regard to the amendment that he tabled. We want to give the court the discretion

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to unravel such matters and take into account the rights of the director and others. I accept that that is a rerun of an earlier debate.

Mr. Grieve: The Minister was correct to say that the director and the enforcement authority have rights. After all, they are bringing the action and they wish to recover recoverable property. I am worried about the innocent individual with associated property who is caught up in the process. Such a position has applied to several clauses that we have discussed, in that the balance is tipped firmly in favour of the director and the enforcement authority against that of the individual. That is why the use of the word ''just'' seemed to go some way to redress that balance in the way in which the court exercises its discretion to exclude property under subsection (2). Clearly, I failed dismally to achieve my objective under the previous amendment.

Mr. Ainsworth: Given the mix-up between the hon. Gentleman and myself, I agree to consider the issue.

Question put and agreed to.

Clause 257 ordered to stand part of the Bill.

Clauses 258 to 262 ordered to stand part of the Bill.

Clause 263

Restrictions on dealing etc. with property

Amendment made: No. 406, in page 152, line 34, leave out

    'in relation to recoverable property'.—[Mr. Bob Ainsworth.]

Clause 263, as amended, ordered to stand part of the Bill.

Clauses 264 and 265 ordered to stand part of the Bill.

Clause 266


The Minister of State, Scotland Office (Mr. George Foulkes): I beg to move amendment No. 407, in page 153, line 34, leave out 'receiving' and insert 'administration'.

This is a purely drafting amendment. It is designed to ensure that the correct Scottish term ''administration'' is used in the clause, instead of the English and Welsh term ''receiving''.

Amendment agreed to.

Clause 266, as amended, ordered to stand part of the Bill.

Clause 267

Recovery orders

Mr. Grieve: I beg to move amendment No. 389, in page 154, line 3, leave out 'may' and insert 'must'.

The Chairman: With this it will be convenient to take the following amendments:

No. 390, in page 154, line 5, leave out first 'and' and insert 'or'.

No. 392, in page 154, line 15, leave out subsection (4)(c).

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No. 393, in page 154, line 17, leave out subsection (4)(d).

No. 391, in page 154, line 24, leave out paragraph (b).

Clause stand part.

Mr. Grieve: The clause deals with recovery orders and the vesting and realisation of recoverable property. It states:

    ''If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order...The recovery order must vest the recoverable property in the trustee for civil recovery...But the court may not make in a recovery order—...any provision in respect of any recoverable property if each of the conditions in subsection (4) is met and it would not be just and equitable to do so, or...any provision which is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998''.

As the Minister will remember, in our debate last week I expressed an opinion that the 1998 Act should be specifically referred to in view of the fact that the front of the Bill states that it is human-rights compliant. I cannot recollect previously having heard the 1998 Act referred to as a fetter on a power that a Bill intended to confer on courts.

Subsection (4) goes on to deal not with the bona fide purchaser for value without notice, who is protected elsewhere in this part, but with the bona fide obtainer of property. The subsection sets out four conditions that must be fulfilled before the court may decide not to make a recovery order. It would be worth while for the Committee to consider them:

    ''The conditions...are that—

    (a) the respondent obtained the recoverable property in good faith,

    (b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it,

    (c) when he took the steps, he had no notice that the property was recoverable,

    (d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him.''

Subsection (5) states:

    ''In deciding whether it would be just and equitable to make the provision in the recovery order where those conditions are met, the court must have regard to...the degree of detriment''

    ''the enforcement authority's interest in receiving the realised proceeds''.

This is an important clause. I tabled some amendments to it, and they have been grouped together. That is sensible, because it enables us to consider the clause as a whole, but that does not mean that I shall push every amendment equally.

I start with amendment No. 389, which in some ways is the most important amendment. It would substitute the word ''must'' for ''may'' in the phrase

    ''the court may not make in a recovery order''.

That would make the provision mandatory. If that were done, ''must'' would nevertheless be heavily qualified by the subsequent wording that I read out.

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That would prohibit the court from making a recovery order if the conditions under subsection (4)(a) to (d) were met.

Let us assume that a case met all the conditions in subsection (4). Can the Minister realistically think of any circumstances in which it would still be just to deprive the innocent party of his property, and, moreover, in which that would still be compatible with the European convention on human rights? If my argument has any force, it would be sensible to substitute ''must'' for ''may''.

Norman Baker (Lewes): I just wondered whether it was a matter of linguistics. The phrase ''may not'' could be read as an instruction. The phrase, ''You may not do this'' is a prohibition. The word ''may'' is permissive, but ''may not'' is prohibitive. I wonder whether the hon. Gentleman's point, which is valid in his argument, is covered by the word itself.

Mr. Grieve: The hon. Gentleman makes a good point, but I am not entirely persuaded by it. If he is right, why should not we have the words ''must not''? In that case, the Minister would have no difficulties in conceding the issue. I inferred from the use of the words ''may not'' that the provision was trying to leave some latitude to the court in such circumstances. If the Minister reassures me that no such latitude was intended to be given—he could do that by way of an intervention—I shall not pursue that amendment. Does the Minister wish to intervene?

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