Restraint order — Receiver’s remuneration — Receiver appointed under statute concerned with crime — Whether remuneration payable out of receivership assets — Criminal Justice Act 1988 (c 33) — CPR r 69.7

Capewell v Revenue and Customs Comrs and another [2007] UKHL 2

HL(E): Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Lord Mance: 31 January 2007

A receiver was in principle entitled to be indemnified in respect of his costs, expenses and remuneration out of the assets of the receivership, and CPR r 69.7 had not effected any fundamental change.

The House of Lords so held in allowing an appeal by the Revenue and Customs Commissioners from the decision of the Court of Appeal (Laws, Longmore and Carnwath LJJ) [2005] EWCA Civ 964; The Times, 20 September 2005 allowing an appeal by the respondent, Robert Anthony Capewell, from Lindsay J [2004] EWHC 1049 (Admin).

LORD WALKER OF GESTINGTHORPE said that the respondent had been charged with conspiracy to cheat the public revenue and conspiracy to contravene the Value Added Tax Act 1994. In October 2002 Lightman J had made a restraint order under ss 76 and 77 of the Criminal Justice Act 1988 in respect of his assets. Jackson J had appointed a management receiver of the realisable assets under section 77(8), his order providing that the costs of the receiver should be paid in the receivership. In February 2004 Lindsay J had dismissed the respondent’s application for the receiver to be discharged. In October 2004 Davis J had discharged the receiver. On appeal by the respondent from Lindsay J, the Court of Appeal held that the receiver should have been discharged on 1 June 2004. At a second hearing concerned with matters including costs the court decided that the introduction of CPR r 69.7 had made a significant change in the law and practice relating to receivers’ remuneration and that the commissioners should be responsible for the receiver’s remuneration from 1 June 2004. It had always been a basic principle of receivership that the receiver was entitled to be indemnified out of the assets in his hands as receiver in respect of costs, expenses and remuneration if he was entitled thereto: Boehm v Goodall [1911] 1 Ch 155, 162. Hughes v Customs and Excise Comrs [2003] 1 WLR 177 correctly stated the relationship between the general law of receivership and the detailed provisions of the 1988 Act. The question was whether it was no longer good law as a result of the coming into force of CPR r 69(7). The rule had not had that result. It set out a procedural code applicable to receivership generally. Its provisions could not override the scheme in the 1988 Act. That scheme was for the receiver’s remuneration and expenses to paid out of the receivership assets.

LORD NICHOLLS, LORD HOFFMANN, LORD RODGER and LORD MANCE agreed.

Appearances: David Perry QC, Mark Sutherland Williams and Rupert Jones (Revenue and Customs Prosecutions Office, Asset Forfeiture Unit) for the commissioners; Andrew Mitchell QC and Abigail Barber (Olliers, Manchester) for the respondent.

Reported by: Michael Gardner, barrister.