Ready Rentals Ltd v Ahmed & Anor [2016] EWHC 1996 (Ch)

[2016] EWHC 1996 (Ch)Case No 0BM30509
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue BIRMINGHAM DISTRICT REGISTRY, AND IN THE CROWN COURT AT BIRMINGHAM, Birmingham Civil Justice Centre
33 Bull Street
Venue Birmingham B4 6DSDate 29/07/2016
Before
MR JUSTICE NEWEY
Between
READY RENTALS LIMITEDClaimant(1) KAAMRAN AHMEDDefendants(2) AREF ZAKARIDefendantTHE CROWN PROSECUTION SERVICEApplicantKAAMRAN AHMEDRespondent
Mr David McNeill (instructed by the Crown Prosecution Service) for CrownMr James Morgan (instructed by HCB Solicitors) for Ready Rentals LimitedHearing Hearing date: 8 July 2016
Judgment ApprovedMr Justice Newey :
[1]This case concerns money paid into Court pursuant to an order made by Judge Cooke, sitting as a Judge of the High Court. Ready Rentals Limited (“Ready Rentals”) and Mr Kaamran Ahmed, who are respectively the claimant and first defendants in the relevant proceedings, wish the fund to be divided between them in equal shares. The Crown, however, contends that a restraint order under the Proceeds of Crime Act 2002 (“POCA”) should be made against Mr Ahmed and, in particular, that that order should extend to the money in Court.

Narrative

[2]In 2010, Ready Rentals brought proceedings against Mr Ahmed and a Mr Aref Zakari in relation to a property at 4-6 Victoria Terrace, Leamington Spa.[3]On 28 March 2011, Judge Cooke, sitting as a Judge of the High Court, ordered Mr Ahmed to grant Ready Rentals a sub-lease of 4-6 Victoria Terrace. He further ordered Mr Ahmed to pay Ready Rentals’ costs of the action, to be the subject of detailed assessment if not agreed.[4]On 8 June 2011, Judge Cooke acceded to a without notice application for a freezing order against Mr Ahmed. The order, which followed the standard form, restrained Mr Ahmed until the return date (viz. 13 June) from removing from England and Wales or in any way disposing of, dealing with or diminishing the value of his assets in England and Wales up to the value of £90,000. However, exceptions to the order allowed Mr Ahmed to spend £500 a week on ordinary living expenses and a reasonable sum on legal advice and representation and to deal with or dispose of his assets in the ordinary and proper course of business. The order also stated (in paragraph 11(4)):
“The order will cease to have effect if the Respondent: (a) provides security by paying the sum of £90,000 into court, to be held to the order of the court or (b) makes provision for security in that sum by another method agreed with the Applicant’s legal representative.”
[5]On 13 June 2011, Judge Cooke made the order (“Judge Cooke’s Order”) that is central to the matters that I have to decide. The order included these provisions:
“1. The Defendant shall forthwith pay into court the £90,000 which is currently held on his behalf by Habib Allied International Bank Plc (trading as Habib Bank UK) where it shall be held, pending detailed assessment of the Claimant’s costs of these proceedings, to the order of the court. Liberty to the Claimant to apply for payment out of monies which are due to it. 2. Save for the purposes of complying with paragraph 1 of this Order the Defendant must not (whether himself, through others acting on his behalf, or on his instructions or with his encouragement) remove from England and Wales or in any way dispose of, deal with or diminish the value of the aforesaid £90,000. … 4. Upon receipt of the monies referred to in paragraph 1 above, the Court shall forthwith pay out of Court to the Claimant’s solicitors the sum of £11,898.50. … 8. The Defendant shall pay the Claimant’s costs of and occasioned by its application for a freezing order on the 8th June 2011, including its costs of and occasioned by the hearing on the 12th June 2011, which costs are summarily assessed in the sum of £11,898.50.”
The order gave anyone served with or notified of it a right to apply to vary or discharge it.[6]The £90,000 was paid into Court in accordance with Judge Cooke’s Order. Having, however, read an email from Detective Constable Farrow of West Midlands Police, Judge Purle QC, sitting as a Judge of the High Court, made an order in these terms on 24 August 2011:
“IT IS ORDERED THAT 1. That none of the £90,000 paid into Court or any interest thereon be paid out unless an application is made to that effect on notice to West Midlands Police …. 2. This order has been made by the Court of its own initiative under CPR 3.3. Any party affected by this order may apply to have it set aside, varied or stayed within 7 days of the date on which the order is served on that party.”
In the event, no application was made under paragraph 2 of the order.[7]By now, on 15 June 2011, Ready Rentals had served a bill of costs in the total sum of £119,112.50. Mr Ahmed served points of dispute and Ready Rentals points of response which reduced the amount claimed to £97,762.41. On 19 November, Ready Rentals requested detailed assessment.[8]There was then an interval of more than three years during which, it seems, Ready Rentals did not pursue its request for detailed assessment of its costs and the Crown did not apply for a restraint order under POCA.[9]On 19 January 2015, a winding-up order was made against Ready Rentals. Mr Gerald Irwin was appointed as Ready Rentals’ liquidator with effect from 5 June.[10]By 21 December 2015, Ready Rentals and Mr Ahmed had negotiated a compromise. They both agreed to an order being made providing as follows:
“The funds in Court, inclusive of all accrued interest, shall be paid to the Claimant’s solicitors HCB Solicitors Ltd and to the First Defendant’s solicitors Thomas Cooper LLP in equal shares.”
[11]On 14 January 2016, Ready Rentals’ solicitors gave notice to West Midlands Police of their intention to lodge the agreed order with the Court. At that stage, however, the Crown applied for a restraint order. Judge Parker QC, sitting as a Judge of the Crown Court, released the application so that the matter could be dealt with in the High Court.[12]On 27 January 2016, Judge Purle gave directions for the application for the agreed order and that for a restraint order both to be listed before me.[13]The matter first came before me (sitting as a Judge of both the High Court and the Crown Court) on 25 February 2016, but it was adjourned to 8 July with directions as to further evidence.[14]Mr Ahmed was represented by counsel at the 25 February hearing. His solicitors have, however, since explained that he is severely ill and has been unable to provide them with instructions. In that connection, they have supplied copies of a letter from a consultant psychiatrist from which it can be seen that Mr Ahmed suffers from bipolar affective disorder and was an inpatient at Solihull Hospital as at the date of the letter (viz. 12 January 2016) and an undated letter from Mr Ahmed’s sister stating that Mr Ahmed “cannot conceivably at this time, understand or address issues of this kind”.[15]In the circumstances, the only parties represented at the 8 July hearing were the Crown and Ready Rentals. I shall return later in this judgment to the implications of Mr Ahmed’s absence.[16]The Crown alleges that Mr Ahmed was involved in three relevant frauds. All three relate to some premises at 32 Bath Street, Leamington Spa which Mr Ahmed bought in 2008 and sold in 2011. Mr Ahmed is said, first, to have obtained a mortgage advance from Lloyds TSB Bank (“Lloyds”) fraudulently when he purchased 32 Bath Street and then, secondly, to have led Lloyds to believe that he had sold the property to a Mr Khan for £740,000 when he had in fact achieved a sale to a Mr and Mrs Ingham for £967,000. The third allegation is that the Inghams were defrauded. Documents produced by the Crown suggest that the £90,000 paid into Court pursuant to Judge Cooke’s Order derived from the proceeds of sale of 32 Bath Street.

The statutory framework

[17]POCA empowers the Court to make a “restraint order” if, among other things, a criminal investigation has been started with regard to an offence and there are “reasonable grounds to suspect that the alleged offender has benefited from his criminal conduct” (see sections 40 and 41). A restraint order prohibits the person in question from “dealing with any realisable property held by him” (see section 41(1)). The expression “realisable property” refers to “free property” (see section 83), and property is “free” unless it falls within limited exceptions which are not relevant to the present case (see section 82). The word “property” is itself widely defined to comprise “all property wherever situated” and to include money, all forms of real and personal property and things in action and other intangible or incorporeal property (see section 84(1)). Section 84(2) provides for certain “rules” to apply in relation to property. These include:
“(a) property is held by a person if he holds an interest in it; … (f) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power; … (h) references to an interest, in relation to property other than land, include references to a right (including a right to possession).”
[18]Section 69 of POCA deals with how powers conferred by the Act, including the power to make restraint orders, are to be exercised. Section 69(2) states that the powers:
“(a) must be exercised with a view to the value for the time being of realisable property being made available (by the property’s realisation) for satisfying any confiscation order that has been or may be made against the defendant; (b) must be exercised, in a case where a confiscation order has not been made, with a view to securing that there is no diminution in the value of realisable property; (c) must be exercised without taking account of any obligation of the defendant or a recipient of a tainted gift if the obligation conflicts with the object of satisfying any confiscation order that has been or may be made against the defendant ….”
However, section 69(3) stipulates that subsection (2) has effect:
“subject to the following rules— (a) the powers must be exercised with a view to allowing a person other than the defendant or a recipient of a tainted gift to retain or recover the value of any interest held by him ….”
[19]Part 9 of POCA contains provisions dealing with insolvency. Section 418 states that, where a person is made bankrupt, various powers, including the power to make a restraint order, cannot be exercised in relation to property comprised in the bankrupt’s estate. Section 426 is concerned with liquidation. Section 426(4) states that the power to make a restraint order (among others):
“must not be exercised in the way mentioned in subsection (6) in relation to any property— (a) which is held by the company, and (b) in relation to which the functions of the liquidator are exercisable.”
Section 426(6) is in these terms:
“The powers must not be exercised— (a) so as to inhibit the liquidator from exercising his functions for the purpose of distributing property to the company’s creditors; (b) so as to prevent the payment out of any property of expenses (including the remuneration of the liquidator or any provisional liquidator) properly incurred in the winding up in respect of the property.”

The parties’ positions in outline

[20]The Crown’s case is that a criminal investigation has been started with regard to the offences that Mr Ahmed is said to have committed and that there are reasonable grounds to suspect that he has benefited from the alleged conduct. That being so, a restraint order should (so it is said) be made prohibiting him from dealing with “realisable property” he holds and, having regard to the wide terms in which the expression “realisable property” is defined, there can be no doubt but that the money paid into Court pursuant to Judge Cooke’s Order is such property.[21]Mr James Morgan, who appeared for Ready Rentals, accepted that a criminal investigation has been started, that there are reasonable grounds to suspect that Mr Ahmed has benefited from the criminal conduct that is alleged and that the money in Court represents “realisable property”. He nevertheless argued that half of the money in Court should be paid out to Ready Rentals in accordance with its agreement with Mr Ahmed. He submitted that the Court should decline to make any restraint order because of delay on the part of the Crown; that Ready Rentals has an equitable charge over the money in Court (as to half of the money or, failing that, the £11,898.50 mentioned in Judge Cooke’s Order) and, hence, holds an “interest” in it within the meaning of section 69(3)(a) of POCA; and that any restraint order should not in any event extend to Ready Rentals’ share of the money in Court having regard to section 426 of POCA.[22]For his part, Mr David McNeill, who appeared for the Crown, disputed that the Crown should be denied relief on grounds of delay; submitted that Ready Rentals has no “interest” in the money in Court (in the context of which contention, Mr McNeill contended that Judge Purle’s order of 24 August 2011 had served to set aside the provision in Judge Cooke’s Order dealing with the £11,898.50); and denied that section 426 of POCA assists Ready Rentals.[23]As I have said, no one attended the hearing on behalf of Mr Ahmed. However, his solicitors wrote to the Court asking for an order to be made in the terms of the agreed consent order. They also said that consent “was given only on the basis that Mr Ahmed would receive his half share of the funds in Court” and suggested that, “[a]t the very least, the consent order should be ordered to be made if the CPS fail to press charges within 28 days”.

The issues

[24]The following issues seem to me to arise: i) Delay apart, is it appropriate to make a restraint order as regards at least some of the money in Court? ii) Should I decline to make a restraint order on grounds of delay? iii) Does Ready Rentals have any (and, if so, what) “interest” (within the meaning of section 69(3)(a) of POCA) in the money in Court? If it does, what are the implications? iv) What (if any) difference does section 426 of POCA make?[25]I shall take these issues in turn.

The case for a restraint order

[26]Having regard to the evidence adduced by the Crown, Mr Morgan was in my view right to concede that a criminal investigation has been started, that there are reasonable grounds for suspecting that Mr Ahmed has benefited from the criminal conduct that is alleged and that the money in Court represents “realisable property”. Subject, therefore, to the points addressed later in this judgment, it seems to me that I should make a restraint order against Mr Ahmed and that that order should encompass the money in Court.

Delay

[27]It is apparent from the evidence that a criminal investigation was started as long ago as May 2009, and Mr Ahmed seems to have been interviewed by the police that year. Moreover, it can be seen from a witness statement of Detective Constable Farrow that the police obtained certain witness statements relating to the alleged 2011 fraud on Lloyds in 2012. The matter was referred to the Crown Prosecution Service in July 2013. No application for a restraint order was, however, initiated until the beginning of this year and, even now, Mr Ahmed has not been charged with any offence.[28]On the other hand, Judge Purle’s order of 24 August 2011 appeared to remove any immediate need for a restraint[29]In the circumstances, I have not been persuaded that I should decline to make a restraint order because of delay. Once such an order has been made, it will fall to be discharged if criminal proceedings are not started within a reasonable time, and the passage of time since the alleged offences are said to have been committed will surely affect what a “reasonable” time is (compare e.g. Trill v Sacher [1993] 1 WLR 1379). Delay does not, however, provide a good reason for not making an order at all.[30]In the circumstances, I consider that I should make a restraint order against Mr Ahmed and that the order should include at any rate Mr Ahmed’s interest in the money in Court. “Interest” in the money in Court[31]As already mentioned, section 69(3) of POCA states that the powers conferred by the Act, including the power to make restraint orders, “must be exercised with a view to allowing a person other than the defendant or a recipient of a tainted gift to retain or recover the value of any interest held by him”. In the present case, Mr Morgan argued that Ready Rentals has an equitable charge over the money in Court and, hence, that any restraint order must allow it to retain or recover the value of that interest. That means, according to Mr Morgan, that Ready Rentals should be permitted to recover the half of the fund that the draft consent order provides for it to take. By way of fall-back position, Mr Morgan submitted that Ready Rentals must at least be entitled to the £11,898.50 which Judge Cooke’s Order said was to be paid out “forthwith” to its solicitors.[32]In support of his contentions, Mr Morgan referred me to authorities showing that a party to proceedings can sometimes acquire an interest in money paid into Court by another party. In Pearlberg v May [1951] Ch 699, for example, the purchaser of a property had paid money into Court in pursuance of an order requiring her to lodge the purchase price in Court or deliver up possession. While rejecting an argument that the vendor had a paramount equitable interest in fund, Evershed MR, with whom Jenkins and Hodson LJJ agreed, took the view that each of the parties could claim to have an equitable interest. He said (at 714):
“The court is doing no more than to take the money into its keeping to abide the result of the action. Both the purchaser and the vendor may fairly say they have equitable interests in it.”
[33]Halvanon Insurance Co Ltd v Central Reinsurance Corporation [1988] 1 WLR 1122 concerned money deposited in an account in the names of the parties’ solicitors “to abide the event of the action”. In the course of his judgment, Hobhouse J considered the character of “a fund which has been paid into court as a condition of the defendant being given leave to defend under RSC Ord. 14, r.4”, which, he noted, will “normally be paid into court ‘to the credit of the action’” (see 1126). Having referred to cases in which defendants had gone bankrupt after making payments into Court, Hobhouse J concluded (at 1127-1128):
“The money in court has not ceased to be the property of the bankrupt but the plaintiff in the action has acquired the right to treat it as security for his claim. The right of the plaintiff is thus analogous to having an equitable charge on the money. The precise nature of the plaintiff’s interest in the fund may depend upon the cause of action which he is asserting and the claim that he is making in the action. Where he is claiming in debt, or claiming an identified sum, there may be some basis for treating him as if he was in the position of asserting a title to the sum in court. Where the plaintiff's claim, as in the present action, is a claim for unliquidated damages no such proprietary interest could arise, and the plaintiff's interest can at best be of the nature of an equitable charge giving him a right after judgment to have recourse to that fund to satisfy his judgment.”
If, therefore, the money at issue had been paid into Court to the credit of the actions: “the position … would be that the money remained the general property of the defendants but was charged with whatever may be found to be the liability of the defendants to the plaintiffs” (see 1128).[34]In contrast, money paid into a joint account was held not to be subject to a charge in favour of the other party in Flightline Ltd v Edwards [2003] EWCA Civ 63, [2003] 1 WLR 1200. In that case, the claimant had obtained a freezing order against the defendant. By consent, an order was subsequently made under which the freezing order was discharged on the strength of an undertaking by the defendant: “Not to withdraw or in any way dispose of or deal with or encumber its interest in the moneys in [an account in the names of the parties’ solicitors] up to a limit of £3,325,000 pending further order of the court or the written consent of [the two firms of solicitors]” (see 1204).[35]The defendant having become the subject of insolvency proceedings, the claimant contended that it was a secured creditor in relation to the money in the joint account. The Court of Appeal held, however, that the relevant order (“the March order”) did not confer any security right on the claimant (see paragraph 53). Jonathan Parker LJ, giving the judgment of the Court, explained:
“47 Although Palmer v Carey [[1926] AC 703] concerned contractual arrangements made between the parties out of court, in our judgment Lord Wrenbury’s statement of principle applies directly to consent orders, such as … the March order, which embody terms agreed between the parties; and also indirectly, by analogy, to other court orders. Thus, the reason why a freezing order does not create a security right over the assets from time to time subject to it is, in my judgment, that a freezing order–without more–does not impose an obligation on the part of the respondent to satisfy any judgment debt out of those assets. Rather, a freezing order provides what Lord Wrenbury described … as ‘a most efficient hold to prevent the misapplication [of those assets]’. As Lord Wrenbury makes clear, that is not enough to create a security right. On the other hand, cases in Professor Goode's category of ‘procedural securities’ are cases in which the clear purpose of the order is to afford a claimant an element of security in the satisfaction of his claim. Hence, by analogy with the principle stated by Lord Wrenbury, a security right is created. 48 The question in the instant case, then, is whether one can spell out of the terms of the March order a provision (albeit not expressed in terms) to the effect that the [defendant] must satisfy any judgment obtained by [the claimant] (up to the specified maximum of £3.325m) out of the moneys in the joint account; or, to put it the other way round, a provision to the effect that if [the claimant] is successful in obtaining a judgment in the action it is entitled to payment out of such moneys (or of so much thereof as is required to satisfy the judgment) as a matter of right. 49 We find ourselves wholly unable to spell out of the March order any such provision. … [W]e can see nothing on the face of the March order (without at this stage bringing into account any background facts) to indicate that anything other than continuing interim protection of a ‘freezing’ nature was intended to be provided. In particular, the terms of the company’s undertaking, as contained in the second schedule to the March order, seem to me to be entirely consistent with the continuance of interim protection of a ‘freezing’ nature until trial or further order. As [counsel for the claimant] accepted, the mere fact that the moneys in the account were under the control of the court does not serve to take the case out of the freezing order category ….”
[36]The reference to “cases in Professor Goode’s category of ‘procedural securities’” related to a passage in Goode on Commercial Law. The current (4th edition) of that work contains this (at 663-664) under the heading “Procedural securities”:
“A party whose claim is purely personal may nevertheless be able to invoke court procedures by which moneys or other assets of his opponent are taken into the custody of the law, either to abide the outcome of the action or for the purpose of enforcing a judgment or order in favour of the claimant. The effect of the attachment is to make the assets in question a security for the claimant to which he can have recourse for satisfaction of his judgment even if the other party has meanwhile become bankrupt or gone into liquidation. Among the acts giving rise to a procedural security are: the issue of an Admiralty writ in rem; the payment of money into court, whether in fulfilment of a condition of leave to defend or in satisfaction of the claimant’s claim or in compliance with an order for security for costs; the payment into court of a fund, or surrender into legal custody of other property, the subject of the action pursuant to an interim order for detention, custody or preservation of the fund or property; the appointment of a receiver of property by the court at the behest of the claimant; and the attachment of an asset by way of execution. By contrast, an order which merely restrains the defendant from dealing with his assets without attaching them in any way operates purely in personam and gives the claimant no preferential rights vis-à-vis other creditors. So the grant of a freezing order … , which is designed to prevent the defendant from rendering a judgment against him abortive by removing his assets from the jurisdiction, does not confer on the claimant a preferential claim to the frozen assets (in which he has no interest of any kind) as against other creditors of the defendant.”
[37]Mr McNeill likened the present case to Flightline. He pointed out that Judge Cooke’s Order, like the order at issue in Flightline, was preceded by, and took the place of, a freezing order. He characterised Judge Cooke’s Order as “effectively a developed freezing order” and submitted that, as such, it can have conferred no proprietary interest on Ready Rentals.[38]However, the Flightline order differed significantly from Judge Cooke’s. The undertaking embodied in the Flightline order barred the defendant from withdrawing, disposing of, dealing with or encumbering the relevant money and closely resembled a conventional freezing order. That being so, it is easy to understand how the Court of Appeal saw the order as providing “interim protection of a ‘freezing’ nature”. In contrast, Judge Cooke’s Order did more than merely restrain Mr Ahmed from disposing of assets. While it included a prohibition on disposals, the relevant part of the order (paragraph 2) was qualified to allow Mr Ahmed to pay the £90,000 into Court, where it was to be held to the order of the Court “pending detailed assessment of [Ready Rentals’] costs of these proceedings”, with “[l]iberty to [Ready Rentals] to apply for payment out of monies which are due to it”. The order also stated that £11,898.50 was to be paid out of Court to Ready Rentals’ solicitors “forthwith” and, unlike a standard freezing order, did not authorise Mr Ahmed to draw on the money the subject of the order for living expenses or legal costs or to deal with it in the ordinary course of business. Further, there can have been no doubt that a sum would be due to Ready Rentals once its costs were assessed. A pre-judgment freezing order requires no more than a good arguable case against the defendant: come trial, the defendant may be held not to have any liability at all to the claimant. By the time Judge Cooke’s Order was made, however, Mr Ahmed had already been ordered to pay Ready Rentals’ costs of the action. All that remained was quantification of that liability.[39]In the circumstances, the better view, as it seems to me, is that Judge Cooke’s Order gave Ready Rentals security over the money in Court to the extent that costs were due to it. The order provided in terms for the £11,898.50 to be paid out of the fund. It is, I think, apparent that Ready Rentals was also to be entitled to have the balance of its costs paid from the fund once they had been assessed. The money was to be held “pending detailed assessment” and, once the costs had been assessed, Ready Rentals would be able to apply for “payment out of monies which are due to it”. The evident intention, in my view, was that the money in Court should be used to meet the costs liability which had already been imposed and which was awaiting quantification. Ready Rentals will thus, as it appears to me, have acquired the right to treat the fund as security for the liability to it.[40]That is not, though, to say that Ready Rentals is secured to the extent of half the money in Court. Had I felt able to endorse the consent order agreed between Ready Rentals and Mr Ahmed, the latter’s liability to the former would have been crystallised by the order. Since, however, the Crown has persuaded me that a restraint order is appropriate as regards at any rate Mr Ahmed’s interest in the money in Court, I do not think I can properly make an order in the terms of the agreed draft. It would, after all, provide for the payment out to Mr Ahmed of money which I consider should be the subject of a restraint order.[41]No similar problem arises in relation to the £11,898.50. That sum was to be paid out forthwith, without any need for further assessment or agreement. It seems to me that, in the circumstances, Ready Rentals will have acquired security over the money in Court to the tune of £11,898.50.[42]Mr McNeill suggested that Judge Purle’s order of 24 August 2011 served to set aside paragraph 8 of Judge Cooke’s Order (i.e. the paragraph dealing with the £11,898.50). However, I do not think that that will have been either Judge Purle’s intention or the result of his (without notice) order. Judge Purle was evidently seeking to hold the ring on a temporary basis; in effect, he was staying parts of Judge Cooke’s Order. He did not say in terms that he was revoking any of Judge Cooke’s Order and I do not consider that he did so.[43]The upshot seems to me to be that: i) Ready Rentals has security over the money in Court for the sums properly due to it in respect of the relevant costs; ii) Ready Rentals must therefore be entitled to take such sums from the money in Court notwithstanding the restraint order against Mr Ahmed; iii) Accordingly, £11,898.50 should now be paid out to Ready Rentals’ solicitors in accordance with Judge Cooke’s Order; iv) Ready Rentals also enjoys security for such further sums as prove to be due to it in respect of costs (in particular, by assessment) and, accordingly, the restraint order must be framed in such a way as to make clear that it takes effect subject to that security; but v) I cannot make an order in the terms agreed between Ready Rentals and Mr Ahmed.

Section 426

[44]The conclusions I have already reached mean, I think, that I do not need to consider the arguments advanced on section 426 of POCA.

Mr Ahmed’s absence

[45]The matters mentioned in paragraph 14 above suggest that Mr Ahmed may possibly lack capacity to conduct the proceedings and so be a “protected party” for the purposes of CPR Part 21. Where a party to civil litigation lacks capacity, the ordinary rule is that no party may take any further step in the proceedings until the protected party has a litigation friend (see CPR 21.3).[46]However, CPR 21.3 allows for departures from that principle. Thus, CPR 21.3(3) bars the taking of further steps “without the permission of the court” and CPR 21.3(4) states that any step taken before a protected party has a litigation friend has no effect “unless the court otherwise orders”. In any event, the Criminal Procedure Rules, which apply to applications for restraint orders, do not contain an equivalent to CPR 21.3.[47]In the particular circumstances of the present case, it seems to me that(a) the question mark over Mr Ahmed’s capacity cannot be an obstacle to the making of a restraint order against him and(b) it is appropriate for me to direct that £11,898.50 should be paid out to Ready Rentals’ solicitors regardless of whether Mr Ahmed lacks capacity. With regard to (a), I have already said that nothing comparable to CPR 21.3 is to be found in the Criminal Procedure Rules. As for (b), an order for the payment out of the £11,898.50 will do no more than discharge a pre-existing obligation of Mr Ahmed and carry into effect paragraph 4 of Judge Cooke’s Order, which was made at a time when there was no concern about Mr Ahmed’s capacity.[48]Just in case, however, Mr Ahmed’s sister (or anyone else) wishes to apply to become Mr Ahmed’s litigation friend and for the setting aside of all or part of the order I am proposing to make, I shall direct that the order for the £11,898.50 to be paid out should not take effect until 1 September 2016.

Conclusion

[49]In short, I shall: i) Make a restraint order against Mr Ahmed that extends to his interest in the money in Court; ii) Nevertheless order that, regardless of whether Mr Ahmed lacks capacity, £11,898.50 should be paid out to Ready Rentals’ solicitors; but iii) Direct that the order for the payment out should not take effect until 1 September 2016.

order

Detective Constable Farrow has explained that, after Judge Purle had made his order, “Advice was sought from the CPS and a view was taken that a Crown Court restraint was unnecessary the monies having been restrained be it civilly”. Further, the police investigations have extended, I gather, far beyond Mr Ahmed and 32 Bath Street. In any event, while POCA provides for “undue delay” to bar the making of a restraint order on other grounds (see section 40(7) and (8)), delay is not stated to be relevant to the power to make a restraint order on the basis that is relevant in the present case, namely, that a criminal investigation has been started (so that section 40(2) applies). Where, however, such a restraint order is made, the default position is (under section 41(7B)) that: “The court—(a) must include in the order a requirement for the applicant for the order to report to the court on the progress of the investigation at such times and in such manner as the order may specify (a ‘reporting requirement’), and(b) must discharge the order if proceedings for the offence are not started within a reasonable time (and this duty applies whether or not an application to discharge the order is made under section 42(3)).”