Chancery Division claim in respect of restrained property struck out as an abuse of the process
AHMET v. CPS: The decision applies and extends the ratio of Capper v Chaney [2010] EWHC 1704 (Ch) (a detained cash case under Part 5) to Part 2 restraint and confiscation proceedings. Michael Green J was clear that A’s sole purpose was to “steal a march” on the confiscation proceedings in the hope of tying the hands of the Crown Court and in those circumstances her claim should be struck out as an abuse of the process.
Martin Evans KC (leading Anna Keighley) was instructed by the CPS.
Background
In August 2021, a PoCA restraint order [RO] was obtained by the CPS against DT who was under investigation for drug trafficking and money laundering which, inter alia, prevented him from dealing with (etc.) the family home, Brindles Farm which was held in DT’s sole name. In May 2022, his partner, A, applied to vary the RO to release funds from a joint account to pay the mortgage on Brindles Farm.
The claim
In November 2022, A issued a Part 8 claim in the Chancery Division (Business and Property Court) for a declaration as to her beneficial interest in Brindles Farm. She joined the CPS as a defendant under CPR 19.2. DT was also a defendant but he neither acknowledged service nor took any part in the proceedings. By the time of the hearing (23rd May 2023) he had been sentenced to 15 years’ imprisonment following guilty pleas to offences under the Misuse of Drugs and s.328 of PoCA (money laundering).
The CPS applied to strike out A’s claim pursuant to CPR rule 3.4 on the basis that it was an abuse of this Court’s process because:
(i) it ignored the scheme laid down by Parliament for the resolution of the issues in the Crown Court in Part 2 of PoCA; and/or
(ii) it was brought for a collateral purpose; and/or
(iii) undesirable forum shopping.
Mr Justice Michael Green agreed, dismissing A’s argument that striking out her claim offended against basic principles of access to the civil courts.
The judge noted that but for the criminal proceedings against DT, A’s claim would not have been brought at all – in reality, it was a claim solely against the CPS.
Part 2 of PoCA provided an exhaustive code for the determination of issues relating to realisable property in the Crown Court. A third party claiming an interest in property had with a right to make representations (with full appeal rights) at every stage. It was plainly an abuse of the process to seek to circumvent the statutory scheme laid down by Parliament by invoking the High Court’s general declaratory jurisdiction: Capper v Chaney applied. Although PoCA did not create ‘exclusive’ jurisdiction in relation to claims over property (vide s.58(5)), the issue in the High Court proceedings approximated in its substantial effect to the issue that would have to be determined in the Crown Court in the confiscation proceedings.
Given that property issues commonly occur in confiscation proceedings, Parliament plainly considered that the Crown Courts were adequately equipped to deal with such issues when it removed the jurisdiction given to the High Court (under the Criminal Justice Act 1988 and the Drug Trafficking Act 1994) in respect of restraint and receivership matters.
Striking out A’s claim did not prevent her from participating in the confiscation proceedings under s.10A or challenging the appointment of an enforcement receiver to sell Brindles Farm under s.50.
Discussion
The decision provides welcome clarity. Where a restraint order has been made, s. 58(5) of PoCA provides that a court in which proceedings are pending in respect of any property which is subject to that order, it may either stay the proceedings or allow them to continue on any terms it thinks fit. In exercising its discretion it must take account of the ‘legislative steer’ in s.69(2) but before doing so the court must give an opportunity to be heard to the applicant for the restraint order - here the CPS.
Whilst there will be circumstances where it would be appropriate for the civil court to permit the proceedings to continue on such terms as it thinks fit (e.g. a claim for possession of property brought by the holder of a legal charge, or a proprietary claim brought by the victim of the alleged crime), where the true purpose in bringing the claim is to steal a march on any confiscation proceedings there may be, the civil court should strike it out as an abuse of the process. Although the Chancery Division had expertise in issues of trust and equity that concern the interests of parties in real property, Crown Courts are routinely called upon to resolve such issues in proceedings under Part 2; in a particularly complex case, it may be desirable to ensure that the application is heard by a High Court judge or circuit judge with the relevant experience: see SFO v Lexi Holdings [2009] QB 376 [§92; Postscript].
If you would like to know more, or instruct Martin, please contact the Practice Directors.