Daya v CPS: Hidden Assets and Certificate of Inadequacy
Daya v CPS: Certificate of Inadequacy and Hidden Assets in Confiscation Proceedings
The recent High Court decision in Daya v CPS [2024] EWHC 1091 (Admin) offers valuable insight into how the courts approach applications for a Certificate of Inadequacy in cases involving hidden assets under the Criminal Justice Act 1988. This case highlights the legal hurdles defendants face when seeking relief from long-standing confiscation orders, especially when those orders are based on findings of unexplained wealth or hidden assets.
What is a Certificate of Inadequacy?
A Certificate of Inadequacy is a legal mechanism that allows individuals who are subject to a confiscation order to apply to the High Court for a declaration that their realisable assets are now insufficient to meet the outstanding debt. If successful, the case returns to the Crown Court, which may reduce the amount owed.
This certificate is often the only route to relief in cases where confiscation orders have remained unpaid for many years, sometimes with significant amounts of interest accruing over time.
Case Background: Daya v CPS
Mr. Pradip Daya, also known as Pradip Chavda, was convicted in 2007 for fraudulent trading, deception, and money laundering linked to fraudulent property investment schemes. The Crown Court found that he had benefitted to the tune of £2.78 million and made a confiscation order in the reduced sum of £2.26 million.
Key points:
The court concluded that Mr Daya held hidden assets worth over £2 million.
Only around £132,000 has been repaid.
With interest accruing at 8% per annum, the debt now exceeds £4.6 million.
The Application for a Certificate of Inadequacy
Mr Daya applied for a Certificate of Inadequacy claiming:
He has no assets and no meaningful income.
His health has deteriorated, and he is reliant on family support.
The continuing confiscation order is unjust and crushing after so many years.
He argued that even if hidden assets existed in the past, he could no longer pay the order or the enormous interest that has built up.
The Court’s Decision
The High Court dismissed the application. The key findings were:
Mr Daya failed to provide any credible evidence about the fate of the hidden assets identified in 2008.
Without an explanation of what happened to those assets, the court could not be satisfied that his realisable property was now inadequate.
The court emphasised that applications for a Certificate of Inadequacy cannot be used to re-litigate the original findings or to obtain a “second bite of the cherry.”
Even significant hardship or ill health does not override the need to demonstrate a genuine change in financial circumstances linked to the assets in question.
Hidden Assets in Confiscation Proceedings
The case underscores the central role that hidden assets play in POCA and Criminal Justice Act confiscation proceedings. Where courts have made findings of hidden assets, subsequent applications for relief face an uphill struggle unless the applicant can clearly demonstrate:
What happened to the assets, or
That the assets have diminished in value through no fault of their own.
Simply asserting poverty, or relying on the passage of time, is not enough.
Implications for Defendants and Practitioners
This case is a stark reminder that:
The burden of proof lies squarely on the defendant in Certificate of Inadequacy applications.
Courts will not disregard historical findings of hidden or unexplained wealth without compelling new evidence.
The growth of interest on unpaid confiscation orders can quickly become unmanageable, reinforcing the importance of early expert advice in these matters.
