T v B & Anor [2008] EWHC 3000 (Fam)

The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.

[2008] EWHC 3000 (Fam)

Case No FD07P00791

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 10/12/2008

Before

THE PRESIDENT

Between

TApplicant

BRespondent

Revenue & Customs Prosecutions Office

Christopher Hames (Instructed by Brookman) for Applicant

The Respondent appeared in person for in person

Sheena Cassidy (Instructed by Revenue & Customs Prosecutions Office) for Intervener

Hearing Hearing date: 19 November 2008

Judgment

Sir Mark Potter P:

[1]The issues before me today arise against the background and in the context of the applicant mother’s application under Schedule 1 of the Children Act 1989 for maintenance in the form of periodical payments in respect of her daughter aged 5 (“the child”) of whom the defendant is the father.

[2]The mother’s C1 was issued on 17 April 2007 in the Principal Registry and has had a tortuous path owing to the lack of co-operation and reluctance in respect of disclosure on the part of the father. The matter was listed for final hearing at the Principal Registry on 19 March 2008, but on that morning the father telephoned the mother’s solicitors to say he would not be attending as he had been the subject of a Restraint Order freezing his assets world-wide.

[3]A copy of that order is before me. It was made by His Honour Judge Michael Stokes QC in the Crown Court at Nottingham upon the ex parte application of the Revenue and Customs Prosecutions Office (“the Prosecutor”). The order was made pursuant to Sections 40-42 of the Prevention of Crime Act (POCA) on the grounds that a criminal investigation was under way with regard to an offence or offences alleged against the father and that he had benefited from his criminal conduct. The order was in wide form, and prevented the father from disposing of, dealing with or diminishing the value of any of his assets whether in or outside England and Wales including various identified assets and in particular a specified property in Cheshire where the father’s former wife lives with her children by the father.

[4]The following exception appeared in paragraph 3 of the restraint

[5]The order expressly provided that anyone affected by it “may apply to the Court at any time to vary or discharge this Order (or so much of it as affects that person)” but that they must first serve the application and witness statement in support on the Prosecutor and the father at least two clear working days before the date fixed by the Crown Court for the hearing of such an application. It also provided, in the form of an undertaking by the Prosecutor, for a copy of the order and the witness statement relied on in support (namely that of Mr M G, the financial investigator in the restraint proceedings) to be served upon the father. That was done and, indeed, it is the position that the father subsequently provided the mother’s process server with a copy of the financial statement. However, I have not seen it; nor have the parties placed it before me.

[6]In this connection, it should be noted that the effect of Rule 57.8 (2)(b) of the Criminal Procedure Rules 2005 is to prohibit use of that witness statement for any purpose other than the purpose of the restraint proceedings unless “the Crown Court gives permission for some other use”.

[7]The mother’s Schedule 1 application was transferred to the High Court and came before me on 3 April 2008 when I made various directions as to disclosure and listed the mother’s application for further consideration on 5 June 2008. On that date, following a degree of revealing disclosure for the father, I made further directions for disclosure and listed the matter for 8 October 2008 to determine the next steps for the mother.

[8]By then it was apparent that, in addition to the existence of the restraint order, there were extant ancillary relief proceedings in the Crewe County Court between the father’s former wife, JP (formerly JB), and the father, about which little information was available. There also appeared before me counsel for the Prosecutor who addressed me with a view to the Prosecutor’s intervention in the proceedings. I gave leave to that effect and I made an order that the matter be listed before me for further consideration with a direction that the parties and any intervener should file and serve position statements and that papers in the proceedings be served on the Prosecutor by 15 October with leave to the Prosecutor to intervene in the proceedings if so advised. I also directed service of the order upon the father’s former wife and granted her liberty to attend the hearing and make such applications as she might think appropriate.

[9]It appears that, at the time of that hearing, the mother’s counsel gave notice that she sought certain information from the Prosecutor and there was some discussion as to whether such information could or should be provided without any commitment being made. However, the Prosecutor later indicated that such disclosure would not be made unless or until the mother intervened in the restraint proceedings before the Crown Court to make an appropriate application.

[10]Rather than take that course, in the applicant’s position statement for today’s hearing dated 11 November 2008 and served upon the Prosecutor, the proposal is made that, in order to avoid the expense of making an application to intervene in the Nottingham Crown Court, I should be invited to sit simultaneously both as a Family Division Judge and as a Judge of the Crown Court pursuant to Section 8 (1) of the Supreme Court Act 1981 which provides:

“8 (1) the jurisdiction of the Crown Court shall be exercisable by – (a) Any Judge of the High Court; (b) … (c) … (d) And any such persons when exercising the jurisdiction of the Crown Court shall be Judges of the Crown Court.” (a) Any Judge of the High Court; (b) … (c) … (d) And any such persons when exercising the jurisdiction of the Crown Court shall be Judges of the Crown Court.”

[11]It was submitted that, sitting in that capacity, I should transfer the restraint proceedings to this Court for the purposes of hearing the mother’s applications. The applications I am invited to grant in that capacity are, as set out in the skeleton argument for the mother: i) An order “joining her to the Crown Court restraint proceedings” ii) An order “pursuant to Criminal Procedure Rules 2005 Rule 57.8(2)(b) giving her permission to serve and file in these proceedings [i.e. the schedule 1 maintenance proceedings] any statements filed in Crown Court proceedings involving the father” iii) An order “requiring the Prosecutor to reveal all action taken by the father and the Prosecutor pursuant to paragraph 8 of the Restraint Order”.

[12]As set out in the form of draft order placed before me by Mr Hames for the mother, the order requested under (iii) has been refined to read as follows:

“The Intervener shall notify the applicant by letter by not later than 26 November 2008 and thereafter shall keep the applicant informed of: • Whether or not the respondent has spent up to £250 per week towards his ordinary living expenses; • Full details of any nomination by the respondent of a bank account or other source of income to such monies to be withdrawn; • Any lists of expenses the respondent has provided; • Any consent given to the respondent to use any nominated account or income for any particular purpose; • Any agreement reached with the respondent to increase the spending limit of £250 per week.” • Whether or not the respondent has spent up to £250 per week towards his ordinary living expenses; • Full details of any nomination by the respondent of a bank account or other source of income to such monies to be withdrawn; • Any lists of expenses the respondent has provided; • Any consent given to the respondent to use any nominated account or income for any particular purpose; • Any agreement reached with the respondent to increase the spending limit of £250 per week.”

[13]The first thing to observe about what is, so far as I am concerned, a novel application, is that it is not and does not purport to be an application to vary the Restraint Order made in the Nottingham Crown Court pursuant to its terms. It is not directed to any matter other than disclosure of information by the Prosecutor for the purpose of assisting the mother in the conduct of her Schedule 1 application made in the Family Division. Furthermore, it acknowledges that, in relation to the orders for disclosure sought, I am only entitled to grant them in the capacity of a Crown Court Judge. This is no more than acknowledgment and recognition of my decision in Webber v Webber

[2007] 2 FLR 116

in which I made clear that, since POCA came into force, the sole jurisdiction to deal with all matters of restraint, confiscation and enforcement pursuant to the terms of POCA resides in the Crown Court and that the procedure to be adopted in confiscation proceedings is similarly exclusively a matter for the Crown Court. The potential or capacity for a Judge of the Family Division hearing an application for periodical payments (as opposed to any kind of property order) in appropriate circumstances to don the mantle of a Crown Court Judge was not raised or in issue.

[14]Nonetheless, that is what the applicant seeks in this case. i.e. she seeks to be “joined” to the Crown Court restraint proceedings simply for the purpose of having access to the documents filed by the Prosecutor in those proceedings, to see whether and how far they may assist her in her Schedule 1 application. Indeed, I have been told by Mr Hames for the mother that, unless the disclosure sought demonstrates that the father has funds or sources of income which could fund the mother’s claim for periodical payments, she is resigned to awaiting developments in the Crown Court before pursuing her Schedule 1 Application further.

[15]The grounds of the mother’s application are essentially that the order sought is a common sense measure whereby the mother’s position in her Schedule 1 proceedings will be assisted by having sight of the documents which she seeks. She submits that sight of the documents will cause no prejudice to the father; indeed, subject to the provisions of Rule 57(8)(b) of the Criminal Procedure Rules, the documents are disclosable in his hands in the Schedule 1 proceedings. Finally, it is submitted that, in so far as she already has possession of the statement in support of the original order, there can be no sensible objection to granting her leave to make use of it in these proceedings.

[16]Before dealing with the merits of the application, I should first deal with the question of my jurisdiction to hear the application. Confronted with the provision in s.8(1) of the Supreme Court Act, Miss Cassidy for the Prosecutor did not argue that, if I deemed it appropriate to entertain the application, I lacked the power to assume the jurisdiction of a Crown Court Judge for the purposes of making an order in the restraint proceedings. However, she submitted it was inappropriate that I should do so.

[17]Miss Cassidy submitted, first, that any application in relation to the restraint proceedings should be made to the Nottingham Crown Court, where a court file exists, and that the application should be made upon proper notice to the Prosecutor so as to give the Prosecutor opportunity to consider a reasoned reaction to the request for disclosure based upon consideration of the content of the documents and the question whether or not their disclosure might prejudice the Prosecutor. Second, she submitted that the content of the criminal investigation is in principle confidential, a position supported by the provision of Rule 57(8) which permits the witness statement of the financial investigator to be used only in the restraint proceedings unless the Crown Court gives permission for its wider use. That being so, the Court should not make any order permitting disclosure for such other use without having sight of the statement or other documents of which disclosure is sought for the purposes of ruling upon the rival submissions of the parties.

[18]Finally, Miss Cassidy did not in any event concede that it is the function or purpose of the POCA regime to afford assistance by way of third party disclosure to a party who does not otherwise assert a claim to or interest in any property the subject of the restraint order.

[19]I am not prepared to make the order which the mother seeks, largely for the reasons advanced by Miss Cassidy.

[20]The regime of the Children Act (in this case relating to a Schedule 1 application for periodical payments) and the regime under the POCA (in this case the making of a restraint order pending commencement of criminal proceedings) are competing but essentially separate regimes. Section 41 of the POCA confers on the Crown Court the power to make a restraint order of the kind made in this case. When an order has been made, it has two effects relevant to the present application. Section 42(3) permits an application to discharge or vary a restraint order to be made to the Crown Court by any person affected by that order. In this case, the mother makes no such application. Second, it triggers the provision in s.58(5) to the effect that, if a Court in which proceedings are pending in respect of any property is satisfied that a restraint order has been applied for or made in respect of a property, the Court may either stay the proceedings or allow them to continue on any terms it thinks fit.

[21]So far as s.58(5) is concerned, it seems to be questionable whether it has any application in the case of Schedule 1 proceedings for periodical payments, as opposed to a claim made specifically in respect of identifiable property falling within the terms of a restraint order. Whether or not that is so, Mr Hames for the mother acknowledges that, unless he obtains disclosure from the Prosecutor which demonstrates that the father has funds or sources of income available to fund the mother’s claim, the mother will be obliged to await developments in the Crown Court before pursuing that claim. In such circumstances he invites me to adjourn the mother’s application generally with liberty to restore on notice to the father and the Prosecutor.

[22]By way of further observation in respect of the POCA restraint order provisions, there is no express requirement upon the Crown, when exercising its powers, to disclose to anyone affected by the order a copy of the witness statement pursuant to which the order was obtained. The position is simply that a party affected may apply to vary or discharge the order (see s.42(3) of POCA) and no doubt if that is done, it is likely that the Prosecutor will be willing and/or the Court will order that the Prosecutor supply a copy of the witness statement or statements to the applicant.

[23]In this case, I do not doubt that, sitting as a Crown Court judge, I would have the power to hear an application to vary or discharge the restraint order were the mother to make such an application. However, she does not, no doubt because she has not yet established her right to a Schedule 1 payment. Furthermore, any application for disclosure of the witness statement pursuant to which the restraint order was obtained is an exercise in shadow boxing, given that the father has already supplied the mother with a copy.

[24]So far as the request for an order pursuant to Rule 57.8(2)(b) of the Criminal Procedure Rules is concerned, I am not prepared here and now to make an order in the terms sought. The purpose of the rule seems to me to be to preserve the confidentiality of witness statements served in those proceedings unless expressly agreed by the Prosecutor or otherwise ordered by the Crown Court. There may be a variety of reasons for this, including a concern to prevent potentially collusive claims as between a potential defendant and a claimant. Whilst no such fear has been expressed to me by the Prosecutor in this case, it is suggested that, by reason for the lateness and informality of the application, the matter has not been able to receive appropriate consideration and it is not conceded that consent is likely to be forthcoming. I do not have before me any of the material concerned and am in no position to deal with the question other than on the basis of principle. It may assist, however, if I state my general view that, assuming that the Prosecutor has no reason to suspect collusion or any improper reason on the part of the mother in seeking the information which she does, it would seem to me wholly reasonable for the Prosecutor to give consent in writing for the statements filed to date in the Crown Court proceedings relating to the assets of the father to be disclosed to the mother for the purpose of her Schedule 1 application. However, if the Prosecutor is not so willing, the proper place for that matter to be dealt with is the Nottingham Crown Court.

[25]I turn now to the application for an order requiring the Prosecutor to furnish the mother with the information which will indicate whether the respondent has or has not operated or sought to operate the exception set out in paragraph 8 of the order and, if so, to supply to the mother the details contained in sub-paragraphs (a)-(c) of that order. I do not consider that the provisions of the POCA contemplate any requirement upon the Prosecutor to supply such information if he is not willing to do so; nor would I think it reasonable in any event to require him to do so the father having stated in open court that he has not in fact operated the mechanism provided for in paragraph 8 of the order.

[26]That of course leaves a glaring question as to what funds have been available to the father for his living expenses and where they have come from. That, however, must be a matter for discovery and interrogation of the husband in the Schedule 1 proceedings rather than an order made against the Prosecutor.

[27]That is the conclusion I have reached on the merits of the application. My refusal is not based upon the view that I lack the necessary jurisdiction to deal with the matter. Whilst I lack the power to entertain the application sitting as a Judge of the Family Division, I could nonetheless do so pursuant to s.8(1) of the Supreme Court Act 1981 if I thought it appropriate. In principle, had all the material been properly before me, I would have been in as good as a position as a Crown Court Judge sitting at Nottingham to consider an application made prior to the institution of any criminal proceedings.

[28]However, I do not encourage the making of such an application in the future. The proper place for consideration of restraint orders and the appropriateness of relief to be granted in relation to them on the application of a party affected is the Crown Court where the original order was made. At the same time, I would observe that, as it seems to me, provided there is no reason to suppose or suspect collusion, tainted knowledge or improper motive on the part of an applicant in seeking leave to make use of a witness statement or statements made in the course of restraint proceedings for the purposes of pursuing a bone fide claim for maintenance, other ancillary relief or relief under Schedule 1, then the Judge should be prepared favourably to consider the making of such an order in the interests of justice.

[29]I now turn to the position of the father’s former wife.

[30]She has not appeared before me, but has filed a lengthy position statement. In that statement she makes clear her position in relation to the present ownership of the property where she has been living together with her son W, (born in December 2002) and her son B, (born in August 2005) since before their birth. Her decree absolute on divorce from her husband was pronounced on 14 March 2008. She sets out the position in relation to the ownership of the property. Its purchase was originally financed by the wife’s parents as well as the husband and later transferred into two offshore family trust vehicles, whereby one trust owns 23% of the property, representing the parents’ capital contribution to the purchase, and the other holds the remaining 77%, representing the defendant’s contribution. The former wife claims to be the protector of the trust, the principal beneficiaries being the children. She makes clear that, in the course of the divorce, she reached an agreement with the father that he would make no claim against the property, in return for which she would not attempt to establish the true net worth of his businesses as an electrical equipment wholesaler and manufacturer/importer. However, just at the time that they were seeking Court approval for an order to that effect, the cottage was made the subject of a freezing order in Commercial Court proceedings brought within the Queen’s Bench Division, shortly after which it was also made the subject of the restraining order in the Crown Court. The former wife has not appeared before me, on grounds of expense, and has made clear that she does not wish to be joined in the proceedings as intervener. She asks that if a decision is made to join the mother’s Schedule 1 proceedings with her claim for ancillary relief, the conjoined proceedings should be heard in the Crewe County Court or, if the High Court is thought to be the appropriate forum, in Family Division proceedings on the Northern Circuit.

[31]Given the fact that the Schedule 1 proceedings are for periodical payments only and that, in the light of my decision above, the mother accepts her Schedule 1 proceedings should be adjourned generally with liberty to restore on notice to the father and Prosecutor, and because, similarly, the mother intends to do nothing further until the Prosecutor has completed his investigations and the outcome of any potential criminal proceedings is known, I consider it premature to rule on the question of joinder. However, as neither counsel for the mother or the father addressed me upon this point at the hearing, I am prepared to hear further submissions on that point when handing down this judgment, should the parties seek to have the matter further considered and resolved at this stage.

order

a) Tell the Prosecutor where the money is to come from, by nominating a bank account or source if income from which such monies will be drawn, and b) Provide to the Prosecutor on request a list of those expenses that he intends to pay or has paid, c) Obtain the consent of the Prosecutor in writing for the use of that account or income for that purpose.