Chief Constable of Hampshire v A. Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER,LORD JUSTICE OLIVER,LORD JUSTICE PURCHAS |
| Judgment Date | 01 March 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0301-2 |
| Docket Number | 84/0093 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 March 1984 |
[1984] EWCA Civ J0301-2
Before:
Lord Justice Waller
Lord Justice Oliver
Lord Justice Purchas
84/0093
1983 C. No. 11379
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (SIR NEIL LAWSON)
Royal Courts of Justice,
MR R. TYSON (for MR ROGER TITHERIDGE, Q.C., and MR D. HOPE) (instructed by Messrs. Theodore Goddard & Co.) appeared on behalf of the Appellant.
MR WILLIAM CROWTHER, Q.C., and MR A. LAYTON (instructed by Messrs. Hancock & Willis) appeared on behalf of the Respondents.
This is an appeal from Sir Neil Lawson, sitting as a Deputy High Court Judge of the Queen's Bench Division, when he refused to grant to the plaintiff an injunction restraining the defendants from withdrawing money from certain hank accounts. The first two defendants, who I shall call "A" and "B", were companies engaged in the buying and selling of secondhand motor vehicles, and the 3rd, 4th and 5th defendants, whom I shall call "R", "V" and "D", were directors of one or both of the two defendant companies and were concerned in the running of both of them.
The plaintiff's case is that those defendants were running a business based on fraud in that the motor vehicles were high mileage police cars which were purchased at auction and which then had the mileometer wound back either to zero or nearly zero, and thereafter the vehicles were offered for sale with false representations about the mileage. Furthermore, they were sold to customers who purchased on hire purchase and the sale price was inflated so that the purchaser was credited with a larger deposit than he had in fact made, and the defendants received higher commission from the hire purchase companies than they had in fact earned. Furthermore, the basic sale price was very much more than the car was in fact worth.
The plaintiff's case is that when the defendants started in business they purchased two properties by means of substantial loans from the bank, and that those loans were paid off out of the proceeds of fraudulent trading. Those two properties have now been sold and there is a sum of £117,000 either in the bank or in the hands of the defendants' solicitor which the plaintiff claims should be frozen as being the proceeds of fraud.
The plaintiff applied in the first instance to Nolan J. ex parte, who granted a temporary injunction forbidding the withdrawal of any sums from the above-mentioned accounts and Sir Neil Lawson, having heard argument, refused to continue that injunction save that he provided that it should continue until the hearing of an appeal against his decision.
Before Sir Neil Lawson and before us the plaintiff has relied upon the case of Chief Constable of Kent v. "V" (1983) 1 Q.B. 34. This was a decision where this Court held (by a majority) that an injunction restraining the defendant from withdrawing money from two named bank accounts was properly made because it was said that the money in those accounts was the proceeds of cheques forged by the defendant. It is not easy to discern the principle for which the case is authority. Lord Denning held that the provision of Section 37(1) of the Supreme Court Act, 1981, conferred "a new and extensive jurisdiction on the High Court to grant an injunction", and that it was no longer necessary "that the injunction should be ancilliary to an action claiming a legal or equitable right".
Lord Denning then turned to what he described as the crucial question in the case, and decided that the Chief Constable had a sufficient interest to apply for an injunction. Donaldson L.J. did not go so far as Lord Denning in describing the effects of Section 37(1), and said: "These are wide words but I am quite unable to see how it can appear to the Court to be just and convenient to make such an order, save in the enforcement or protection of a legal or equitable right or interest". And Donaldson L.J., basing his conclusion on Chic Fashions (West Wales) Ltd. v. Jones (1968) 2 Q.B. 299, which dealt with the police right to seize goods, went on: "I consider that the common law can and should similarly invest the police with a right to 'detain' monies standing to the credit of a bank account if and to the extent that they can be shown to have been obtained from another in breach of the criminal law".
In effect, the learned Lord Justice was holding that this was a legal right within his earlier words. Slade L.J. held "that the Court would have no jurisdiction to grant the Chief Constable an injunctive relief save in the enforcement or protection of a legal or equitable right". He was then broadly accepting the formulation of Donaldson L.J. But Slade L.J. rejected Donaldson L.J's reasoning in relation to the Chief Constable, saying that only if it were possible to say that the Chief Constable had a present or contingent legal or equitable right to demand that such monies be actually paid over to him would he have the right to injunctive relief. Therefore, there is a fundamental difference in the conclusion of Slade L.J. compared with the conclusions of Lord Denning and Donaldson L.J. They each take the view that it being settled that the Chief Constable would have the right to seize property believed to have been stolen found on the premises of a defendant, it follows that he should have the right to injunctive relief to prevent the proceeds of crime being dissipated—Lord Denning because of the change in the law in 1981 enlarging the power of the Court, and Donaldson L.J. taking the view that it is a logical step from the Chic Fashions case. Neither Lord Denning nor Donaldson L.J. regards it as essential that the Chief Constable should have the right to have the money actually paid over to him which is the view of Slade L.J.
Sir Neil Lawson preferred the judgment of Slade L.J., finding the reasoning of Lord Denning difficult to follow. In my judgment, however, there was agreement between Lord Denning and Donaldson L.J. that there is power to grant an injunction to prevent the identified proceeds...
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