Ready Rentals Ltd v Ahmed & Anor

A restraint order under the Proceeds of Crime Act 2002 may extend to money paid into court where the statutory conditions are met. Delay does not itself bar an order based on a criminal investigation, although the order must be discharged if proceedings are not started within a reasonable time. The court must preserve a third party’s existing security over the fund. A payment-in order may create procedural security where it secures an existing liability, rather than merely restraining dealings with assets.

Ready Rentals had obtained orders requiring Mr Ahmed to pay £90,000 into court pending detailed assessment of its costs. Ready Rentals and Mr Ahmed later agreed that the fund should be divided equally. The Crown applied for a restraint order under the Proceeds of Crime Act 2002, alleging that the money represented proceeds of fraud.

Ready Rentals accepted the statutory prerequisites for restraint but relied on delay, its security over the fund, and the liquidation provisions of the Act. Mr Ahmed was absent because of concerns about his capacity. The issues were whether restraint was appropriate, the effect of delay, the extent of Ready Rentals’ interest, and the effect of section 426.

1. The evidence established a criminal investigation, reasonable grounds to suspect that Mr Ahmed had benefited from criminal conduct, and that the money in court was realisable property. A restraint order was therefore appropriate and extended to Mr Ahmed’s interest in the fund.
2. Delay did not bar the order. The application relied on section 40(2), for which delay was not stated to be relevant. However, under section 41(7B), the order had to include reporting requirements and be discharged if proceedings were not started within a reasonable time. The passage of time would affect what was reasonable. The court referred by comparison to Trill v Sacher [1993] 1 WLR 1379.
3. The court distinguished Flightline Ltd v Edwards [2003] EWCA Civ 63. Judge Cooke’s Order did more than provide interim freezing protection. It required payment into court pending assessment of an already-established costs liability and provided for £11,898.50 to be paid out forthwith. It therefore gave Ready Rentals security for costs properly due, but not security for half the fund under the later proposed consent order.
4. The reasoning drew on Pearlberg v May [1951] Ch 699 and Halvanon Insurance Co Ltd v Central Reinsurance Corporation [1988] 1 WLR 1122. The nature of the interest depended on the purpose and terms of the order, not merely on court control of the money.
5. The possible lack of capacity did not prevent the restraint order or payment of £11,898.50. The payment was postponed until 1 September 2016 to allow an application concerning representation.

The proposed equal division was refused. The restraint order was made subject to Ready Rentals’ security, and £11,898.50 was ordered to be paid to its solicitors after the postponement.