The UK Supreme Court decided that where an appointment of a receiver is made at the application of the Crown Prosecution Service (CPS) but later quashed the CPS must pick up the costs even though they were not contractually bound to indemnify the receiver.
CPS applied for a receiver to be appointed over Eastenders Group under the Proceeds of Crime Act 2002 (POCA).The terms of the appointment stated Eastenders Group would be liable for any costs incurred by the receiver. Two months later the receivership order was quashed. An issue arose as to who should pay the receivers costs of £770,000.
Eastenders argued they should not be liable as to liability would breach the Group’s right to peaceful enjoyment of its possessions under Article 1 of Protocol 1 to the European Convention on Human Rights and so would be unlawful under s. 6 Human Rights Act 1998. CPS argued POCA did not allow them to pay the costs. The receiver simply wanted someone to pay.
Even though POCA did not contain a provision which allowed the CPS to pay the receivers costs the appointment had been made at their behest and on the basis his work would not be voluntary. The CPS should pay the expenses.
The decision should be welcomed as surely where an applicant requests a receiver is appointed and that appointment is later quashed it cannot be left to the receiver to suffer the burden of costs incurred. Of the two parties (Eastenders and CPS) it seems fair that CPS should meet the burden where the order is later quashed.