: Mr Nh Sinclair, Court Appointed Receiver of Craig Matthew Johnson v Craig Matthew Johnson (1) Kim Michelle Johnson (Previously Thompson) (2) Carl Andrew Bailey (3) Cyber Success International Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BURTON |
| Judgment Date | 30 November 2006 |
| Neutral Citation | [2006] EWHC 3382 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CJA/115/2002 |
| Date | 30 November 2006 |
[2006] EWHC 3382 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2
Mr Justice Burton
CJA/115/2002
MR B STANCOMBE (instructed by Moon Beever) appeared on behalf of the APPLICANT
MR S HELLMAN (instructed by Terry Jones) appeared on behalf of the 3rd RESPONDENT
This case arises out of the anticipated and, in the event, actual conviction of Mr Craig Matthew Johnson, the defendant, for serious offences of fraud involving an international network of interlocking companies. He was convicted, together with a Mr Saunders on 12 June 2006, of offences involving an alleged criminal benefit of approximately �161 million and sentenced on 14 June 2006 to ten and a half years' imprisonment. In subsequent proceedings, the defendant pleaded guilty to money laundering offences, the benefit from which is said to have been some �7 million, and was sentenced to two and a half years' imprisonment consecutive.
His then solicitor, a Mr Morris, was either convicted or pleaded guilty and was sentenced for money laundering in addition. Confiscation proceedings against the defendant are imminently to be heard, but an order was made by Moses J (as he then was) on 23 September 2002, appointing Mr Sinclair ("the Receiver") as Receiver and manager of the defendant's assets, and a restraint order was made, restraining dealing with the defendant's assets worldwide and ordering disclosure of information by the defendant.
A number of steps has been taken by the Receiver since September 2002, and the order has been variously amended and further orders made, but the issue before me relates now only to the property Meaford Hall, Meaford Road, Meaford, Stone, Staffordshire, and the chattels still remaining there. This property remains registered in the name of the second respondent, Mr Bailey. But he sold the property and the chattels for �1.3 million (�200,000 of it appropriated in respect of the chattels) in 2001, and claims no continuing entitlement. Meaford Hall is presently occupied by the first respondent, Kim Thompson, the defendant's girlfriend, who also claims no interest in the property or right to continue to occupy it.
Although joined, both these respondents have played no part in the proceedings, although Miss Thompson has produced some documents. The only claim to the property as against the defendant, whose beneficial property the Receiver asserts Meaford Hall to be, is a Hong Kong company called Cyber Success International Limited (CSIL). This company, the third respondent, for whom Mr Stephen Hellman of counsel appears, claims that it owns Meaford Hall legally and beneficially. The Receiver, represented by Mr Barry Stancombe of counsel, resists CSIL's application and claims its own declaration as to the legal and beneficial entitlement in the property of the defendant. Alternatively, in any event the Receiver claims an order for the possession of the property and the sale of the property and chattels, pending subsequent inquiry, if such be required, as to their ownership.
An alternative and very much fall-back case, resting upon the existence of a lease of the property to the defendant from CSIL, has fallen away now that the five-year term of such lease has expired.
CSIL made an application for an adjournment at the outset of the hearing, which I rejected, both for the reasons given in my judgment on that application (to which I refer), and because of the need to resolve the ownership, or at any rate the issue of possession and sale of the property, as soon as possible, given the expense of its upkeep and the risk of possible enforcement proceedings by the local planning authority in respect of recent works carried on at the property.
The reason for the adjournment application was that, by deliberate choice, two of the deponents who were required to attend for cross-examination by order of Ouseley J of 25 May 2006, Mr Cheung, the present director of CSIL, and Mr Soh, its consultant, did not attend at this hearing, fixed for their convenience and that of counsel, four months ago. Nor did a former director of CSIL, Mr Renato Caruana, whose absence was, as I concluded in my judgment, wholly insufficiently explained.
Ouseley J's order provided in paragraph 5 that all deponents were to attend for cross-examination on 21 days' written notice, which was given. In the event that such notice was given and any deponent failed to attend, his or her evidence was not to be read without the permission of the court. In refusing the adjournment, I nevertheless gave permission for the statements to be adduced without there being cross-examination as planned, although with the inevitable diminution of their value.
The result of the absence of those deponents, and of the continuation of the proceedings, is as follows:
(1) The person in whose name Meaford Hall is registered makes no claim to the property, nor does its present occupier.
(2) The defendant, who is now in prison, has denied any claim to entitlement to the property or the chattels. He does not attend and he gives no evidence.
(3) CSIL, which is actually laying claim to this property and for whom the three absent deponents made their short witness statements, produces no evidence other than by the statements, with their exhibits, from deponents whose truthfulness was bound to be, and in their absence is in any event now all the more, challenged by the Receiver, and who have not attended for cross-examination. CSIL does not have the benefit of any registration. It is simply asserting beneficial ownership of property registered in Mr Bailey's name. The value and reliability of these untested statements, particularly set against the substantial quantity of contemporaneous documents, some few of which they have supplied, but in greater part obtained by the Receiver (either from the prosecuting authorities or from their own investigations), which require explanation or justification if the case asserted by CSIL is to begin to be accepted, must obviously be slight.
(4) By a consent order of September 2006, it was ordered that CSIL give by 4 October 2006 specific disclosure to include documents described in a schedule to the order, and that in the event that CSIL fail to comply with that paragraph of the order, it should be debarred from serving or relying on any further evidence without leave of the court.
The documents sought which were specified in the schedule and to whose disclosure, as I have indicated, consent was given by those representing CSIL, rightly accepting their obvious relevance and materiality, related, among other things, to the acquisition of Meaford Hall from Mr Bailey, the source of the money said to be used to purchase it, and to the transfer of the shareholding in CSIL between Mr Caruana and Mr Cheung, said to have occurred on 5 May 2003; and other documents, both central to the issue and likely to have been available to CSIL, indeed without which one would have thought that their case could not realistically have been hoped to be established, if indeed they had a hope of proving their entitlement. There was non-compliance with the order.
I am invited to, and do, draw the inference that if there were documents such as those specified in the schedule, and which for reasons that will become obvious, as I have indicated, they ought to have, and ought to want to produce, then they would have been produced �or at least would have given explanation as to why they did not produce them �showing what steps they had taken to seek to produce them. This morning, after I had reserved judgment yesterday to today, a slim bundle of documentation was produced by Mr Hellman, as having been faxed to him to his chambers direct, from some source or other described as being from Cyber Success, although I note that the fax header sheet describes them as coming from "unknown".
The documents are limited apparently to the issue of the transfer of the shareholding between Mr Caruana and Mr Cheung. They are not, on their face, convincing or persuasive. They have been produced not only after the close of the two-day hearing before me, and when it was obvious that their absence was important even when Mr Hellman produced his skeleton prior to the hearing, but of course also notwithstanding the consent order to which I have referred, which debars the production of any further evidence. I have no hesitation whatever in regarding them as of no value, and certainly of not being appropriate to be adduced either now or at all. I disregard them and, insofar as I make comment hereafter as to the inference to be drawn from the absence of any evidence relating to the transfer of the shareholding, that remains completely undiluted by the late production, which I have rejected, of such purported further documentation.
Mr Hellman puts CSIL's case in four parts: by reference to (1) the initial purchase; (2) the lease of Meaford Hall to the defendant; (3) money spent on the property in respect of works of alteration and interior decoration done by Grosvenor House Carpets and Interiors ("Grosvenor") in 2001 and early 2002; (4) monies spent on further works done in 2005 and 2006 on the property by NJJ Homes Limited.
Mr Stancombe too relies on those first three aspects in support of his claim that the...
To continue reading
Request your trial