W v W Crown Prosecution Service (Intervener)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ryder |
| Judgment Date | 03 September 2012 |
| Neutral Citation | [2012] EWHC 2469 (Fam) |
| Court | Family Division |
| Date | 03 September 2012 |
| Docket Number | Case No: SN10D00653 |
[2012] EWHC 2469 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Ryder
Case No: SN10D00653
and
Ms Hannah Wiltshire (instructed by Jeary & Lewis) for the Applicant The Respondent in person
Ms Sheena Cassidy (instructed by CPS) for the Intervener
These are financial remedy proceedings in the Family Division of the High Court. I shall refer to the parties where appropriate as wife (W) and husband (H) respectively. The Crown Prosecution Service (the Crown) is an intervener.
There is an application for financial relief in all forms issued by the W on 20 April 2010 and an application by the Crown to vary a restraint order imposed by the Crown Court on 27 May 2009. There is also an application by the Crown in contempt against both the H and the W which has not been pursued and is by an order made in this hearing withdrawn.
The background to the proceedings is that a criminal investigation was started in April 2009 regarding theft, Fraud Act and money laundering offences, the victim being Friends Provident Life and Pensions Ltd which I shall refer to as Friends Provident (FP).
The H held 2 investment policies with FP. One of the facilities open to him was the opportunity to switch units from one fund to another within those policies in order to legitimately enhance returns. On 20 December 1996, H took out a Capital Investment Bond Policy with FP, making a single premium investment of £120,000: the assured lives being H and W, although the policy was in H's sole name. From the commencement of this policy until 1 May 2003, H and W made a number of switches for which returns were achieved. The value of the Bond as at 1st May 2003 was £501,170.33.
On 3 August 2005, H started an Investment Portfolio Bond with a single premium of £269,088.73 funded primarily by a re-mortgage over the former matrimonial home.
On or about 2 May 2003, FP changed its daily unit price fixing time. From this date, approximately 950 switches of funds on the two policies were made in each case on an instruction sent by fax. The faxes were received either from the former matrimonial home, a property in France which the parties owned or two hotels. The majority of the faxes were fraudulently and purportedly sent several hours earlier than actually received by FP. This allowed H to take advantage of being able to study the markets before making switches.
Both H and W were arrested on 6 May 2009. H was charged on 12 November 2009 with a number of criminal offences covering a period from May 2003 until April 2009. At Swindon Crown Court in May 2010, he pleaded guilty to eight Fraud Act offences occurring between 2007 and 2009. For the purposes of the confiscation proceedings, the Crown did not accept the basis of plea put forward on H's behalf relying on the Court of Appeal's rejection in R v Chambers [2008] EWCA Crim 2467 of the submission that the judge in confiscation proceedings was bound by the basis of plea. H was sentenced to 3 years imprisonment on 27 July 2010 and subsequent to his arrest a restraint order was made over his assets pursuant to section 41 of the Proceeds of Crime Act 2002 ( POCA 2002).
Confiscation proceedings against the H were heard in the Crown Court in January 2012. At that hearing, a confiscation order was made against the H in the sum of his benefit i.e. £4,812,245. A compensation order was made in favour of FP in the sum of their loss i.e. £4,287,563 which is to be paid from the sum confiscated. The H was given six months to pay. Accordingly, the questions of benefit, the value of that benefit, the amount to be recovered (the confiscation order) and the amount to be returned to the victim (the compensation order) are now settled, subject only to any application to vary the confiscation order. It should be noted that the quantum of the confiscation order is wrongly set out on almost all of the documents submitted to this court. The confiscation order made by the Crown Court as confirmed by the order before me is in the sum of £4,812,245.
At an earlier hearing in the Crown Court the possibility of unravelling the transactions was canvassed and an opportunity was provided by this court to investigate the feasibility of that course and its tax and costs implications without prejudice to the Crown's submission that such a course might undermine the effectiveness of the compensation regime. In the event, the H did not succeed in persuading anyone to pursue that course. The issues in the Crown Court proceedings and the family proceedings have been considered separately in accordance with the principles explained by the President in Webber v Webber (Crown Prosecution Service intervening) [2007] 1 WLR 1052.
The H and W were married in 1994. The H is 51 and the W 53. The H was released from prison in the Autumn of 2011. On 20 April 2010, the W presented a petition for divorce. There are two children of the marriage: a daughter aged 17) and a son aged 15). The W lives in the former matrimonial home with the children. At the time of the hearing the H was about to move to accommodation provided by a friend. This was a 16 year marriage. The children are both at school and I am told that they will each wish to move into tertiary education. The son has a rare medical condition which is unexpectedly in remission but which is relevant to the discretionary exercise this court is asked to undertake.
An agreed schedule of the matrimonial assets is attached to this judgment. The only amendment required is as to the liabilities of the W.
The W asserts a 50% beneficial interest in the former matrimonial home, a 50% interest in a property held in joint names (the second English property) at which the W says is a pre-criminal untainted joint investment and 50% of the sale proceeds of the parties' French property on the basis that it was purchased with funds from an earlier untainted French property. She seeks to have the former matrimonial home transferred into her sole name and for there to be a lump sum which would have the effect of allowing her to discharge the mortgage if her own assets are preserved and remain available to her. Accordingly she seeks an order that:
a) She retain all assets in her sole name
b) She retain funds held on account (but restrained) by her solicitors
c) The former matrimonial home be transferred to her
d) She receive a lump sum payment to discharge the mortgage secured on the former matrimonial home
e) She receive nominal periodical payments from the H
f) She will relinquish to the Crown/transfer to the H her interest in any other jointly owned property
g) The restraint order be varied to enable implementation of the above.
The H agrees with the W's position.
The Crown dispute that the W is entitled to the relief sought by her. It disputes that the W has the beneficial interest asserted by her in the properties, in particular, the balance of the proceeds of sale of the French property. It disputes that she should receive the lump sum sought by her although it concedes that to the extent to which there are surplus assets over the amount required to meet the confiscation order against H, some of those can be transferred to the W.
At the confiscation hearing in January, the H accepted that he held assets with a value greater than the benefit received by him i.e. greater than £4,812,245. The Crown submits that the H is bound by that concession, and unable in these proceedings to argue that he holds assets worth less than that sum.
As regards the W's position, however, the Crown accept that she is not bound by the H's concession. In the case of In re Norris [2001] UKHL 34, their Lordships' House considered that, because a third party applicant was not a party to the confiscation proceedings and so had no standing in the same, it could not be argued that that third party was bound by the Crown Court's findings as to the defendant's realisable assets. It is open to the W to assert that she has a greater beneficial interest in the assets than that suggested by the H.
In the event that this court makes findings in these proceedings that the W has a beneficial interest in assets considered to be realisable assets in the Crown Court or succeeds in having those assets transferred to her then the H will apply under section 23 POCA 2002 for a reconsideration of the available amount.
I have heard oral evidence from both the W and the H, who have been cross examined in some detail by the Crown. The Crown's evidence as to realisable assets and as to the nature and extent of benefit and tainted assets is contained in written evidence which has been the object of detailed submissions.
Despite serious and sustained cross examination by the Crown, the W's evidence was never seriously in doubt. I hazard a guess that is why the Crown never pursued a case against her in the criminal courts. For all that the Crown's position is entirely proper, and as a matter of public policy it is, in so far as it was an attempt to show that the W was tainted rather than the assets, it had all the appearance in fact of an expensive, adversarial and ultimately disproportionate exercise. It became patently obvious from shortly after the W got into the witness box that she had not known of the H's fraud at the time he perpetrated it and that her knowledge of financial matters both generally and domestically was superficial and by and large obtained after the events upon which the Crown relied. That would have been as obvious to the investigating officers as this court. The W was a credible and reliable witness of her own lack of financial sophistication and her entire and unquestioning reliance on the H. I find as a fact that...
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