Syed Ahmed and Shakheel Ahmad v Junfang Xu

(Via Microsoft Teams)

THE JUDGE:

Introduction

This is my judgment on three applications that were heard by me on 23 January 2024.

The context for the applications is two earlier orders made by this court: a restraint order made against the assets of Syed Ahmed, the defendant, by Collins J on 23 February 2007 and a receivership order made by Mitting J on 13 January 2015. The current issue relates to the application of those orders as varied in various respects to a bank account held with HSBC in the name of the defendant's wife, Junfang Xu (“the HSBC account”). This was restrained by variation to the restraint order on 13 March 2023 by Andrew Baker J on a without notice basis.

The first two applications before me, both sealed on 17 August 2023, were made by Ms Xu. By the first, she sought to discharge the 13 March 2023 variation order and release the HSBC account from restraint. By the second she sought, in the alternative, an order that she could draw £500 a week in living expenses from the HSBC account. The third application, sealed on 8 January 2024, was made by the Crown Prosecution Service (“the Crown”) to add the HSBC account to the receivership order.

This hearing was conducted by Microsoft Teams at the request of the defendant and Ms Xu as they currently live in Scotland. They represented themselves in both written and oral submissions. I was also assisted by the submissions from Mr Newbold, counsel for the Crown. The court appointed Receiver, Christine Barlett, had provided evidence to assist the court on the material issues. Her counsel, Mr Pons, attended to deal with any matters arising, but not to make positive submissions.

The key evidence I considered was as follows: (1) a witness statement from Aron Bolton, a senior officer from HM Revenue & Customs based in their fraud investigation service dated 9 March 2023 that had been prepared in support of the application for the March 2023 variation; (ii) a further statement from Mr Bolton dated 21 August 2023 prepared in response to Ms Xu's application; (iii) a statement from Nasra Butt a specialist prosecutor employed by the Crown Prosecution Service dated 27 December 2023 prepared in support of the Crown's application to vary the receivership order; (iv) two statement from Ms Xu date 13 June 2023 that she had provided in support of her applications; (v) a third statement from Ms Xu dated 16 January 2024; (vi) a statement from the Defendant dated 15 January 2024; and (vii) a statement from the Receiver dated 9 January 2024.

The applications to be determined and the order in which they are to be determined.

Only Ms Xu's two applications had formally been listed to be heard on 23 January 2024. However, by their letter to the court dated 27 December 2023 enclosing their application, the Crown had asked that their application be heard at the same time, given the overlapping issues between all three applications.

The defendant and Ms Xu appeared to object to this course on the basis that while Ms Xu had read the Crown's application she had not had the opportunity to go through all the paperwork.

The Crown had served their application by email on 9 January 2024, two weeks before the hearing. Accordingly, they had given the defendant and Ms Xu considerably more notice than the 7 days' period indicated by the RSC Order 115 rules 7 and 23 which continues to apply to applications of this nature.

The defendant had prepared a witness statement specifically in response to the application by the Crown dated 15 January 2024. Ms Xu had also provided a witness statement dated 16 January 2024 responding in broad terms to what she said the Receiver and the Crown Prosecution Service had said.

I was therefore satisfied that the defendant and Ms Xu had had sufficient notice of the Crown's application and that it was consistent with the overriding objective for all three applications to be heard together.

The Crown's application was also relevant to Shakeel Ahmad, the defendant's co-defendant, given that the receiver had been appointed to realise the assets of both the defendant and Mr Ahmad. Mr Newbold told me that it had not been possible to serve the application on Mr Ahmad. It was, however, unlikely that he would have much to say about the application given that any monies paid towards the confiscation order of the defendant will also be credited towards the confiscation order of Mr Ahmad. I was satisfied that this issue was no barrier to hearing the Crown application either. Provision can be made for Mr Ahmad to be given liberty to apply to the court if need be.

Having decided to consider the Crown's application I concluded that it was appropriate to consider that application first. This was because if that succeeded, Ms Xu's applications would fall away. Equally, if the Crown's application failed, the 13 March 2023 variation order restraining the HSBC account would likely be discharged.

As a final observation, during the course of submissions the defendant told me that he was bringing a fourth application seeking to restrain the assets of another party, Rohail Aslam. However, it did not appear that this application had been issued or served, nor was I provided with a copy of it even in draft. It was therefore not appropriate to deal with this application at the hearing on 23 January 2024.

Mr Newbold pointed out that the application appeared to be legally flawed as the Criminal Justice Act 1988 does not permit a defendant to restrain a third party's assets. Further, he pointed out that the application appeared to be inconsistent with previous findings that had been made by Flaux J about the dealings between the defendant and Mr Aslam. It was, he said, a speculative application made in respect of unknown and unspecified assets. These matters indicated that the existence of the application “in the wings” was not a reason to delay determining the Crown's application.

The facts

This matter has a long and complex history involving many applications to this court as well appeals to the Court of Appeal and the Supreme Court. The history is set out comprehensively in the statements of Mr Bolton and Ms Butt. The key details for the purposes of these applications are as follows.

The defendant and a number of co-defendants, including Shakeel Ahmad, were convicted of conspiracy to cheat the public revenue on 28 March 2007. They were sentenced to periods of imprisonment – seven years in the defendant's case — which have now been served.

Confiscation proceedings followed pursuant to the Criminal Justice Act 1988 (“the CJA”). On 5 July 2010 the defendant and Shakeel Ahmad were each ordered to pay £92,333,667 by Flaux J sitting in the Crown Court at Leicester.

Following appeals against the confiscation orders to the Court of Appeal and the Supreme Court, the defendant and Shakeel Ahmad were each ordered to pay a confiscation order in the sum of £16,145,098, with the total recoveries from two defendants, before consideration of interest, being limited to that sum.

An application was made by the Crown to this court for an appointment of an enforcement Receiver to realise the assets of the defendant and Shakeel Ahmad. The Receiver was appointed by Mitting J at a hearing on 13 January 2016.

To date, although £10,292,233.10 has been paid, £5,852,864.90, in addition to accrued interest, remains outstanding.

The receivership order was varied subsequently as disputes with third parties in relation to the ownership of the assets were resolved. By a variation order sealed on 4 July 2017 Jay J extended the receivership order to a large multi-roomed property called ‘Southlands’ in Ivor Heath, Buckinghamshire. This is held in the name of Amorel Properties Limited, a BVI company. The variation order recorded that the defendant and Shakeel Ahmad were the beneficial owners of Southlands.

In the course of an application to this court in March 2023 to suspend possession proceedings in relation to Southlands, Ms Xu provided evidence indicating that it had been let to tenants and the rental income paid into an HSBC account held in her name.

The Crown therefore applied to restrain the balance of the HSBC account. The previously made restraint order was varied to include the account by the order of Baker J to which I have referred. On 13 March 2023 it was restrained with a balance of £19,196.25.

Following a number of applications...