Chellapermal v The Financial Conduct Authority & Ors

A claim may be struck out as an abuse of process where it seeks to re-litigate an issue already determined by another court, even if the later court has jurisdiction to decide it. The same result may follow where the claim circumvents a statutory appeal scheme or seeks to obtain a decision for use in related proceedings. The existence of a statutory scheme does not necessarily oust the High Court’s jurisdiction, but it may make the exercise of that jurisdiction abusive or inappropriate. Applications asserting equitable interests in restrained property may exceptionally be considered by the civil courts where the issues are complex; that does not confer an absolute right to proceed there.

The claimant issued Part 8 proceedings seeking declarations that funds in her daughter’s restrained bank account belonged to her and represented surplus proceeds from the sale of property. The Financial Conduct Authority applied to strike out the claim under CPR 3.4(2), contending that the claimant had already advanced and lost the same proprietary claim before the Southwark Crown Court, that she was attempting to bypass the statutory scheme under the Proceeds of Crime Act 2002, and that the proceedings had a collateral purpose.

The Crown Court had refused to vary the restraint order in February 2016. The claimant had applied for permission to appeal to the Court of Appeal Criminal Division but had not pursued the application. Confiscation proceedings, in which ownership of the funds would again be relevant, remained pending. The central issues were whether the Chancery claim was abusive and whether it should be adjourned.

1. The application to strike out was granted. The claim was struck out as an abuse of process under CPR 3.4(2).

2. The claimant’s proprietary claim had already been heard and determined by HHJ Gledhill QC in the Southwark Crown Court. The Crown Court proceedings were civil in character and the issue had been determined on the civil standard of proof. The Chancery claim therefore sought to re-litigate the same issue and amounted to a collateral attack on the earlier decision.

3. The claimant had no absolute right to have the proprietary claim determined in a court of equity. The postscript to SFO v Lexi Holdings Plc [2008] EWCA Crim 1443; [2009] QB 376 recognised that complex equitable issues might appropriately be adjourned to a specialist Chancery judge. The present claim was neither complex nor unsuitable for determination in the Crown Court.

4. The Proceeds of Crime Act 2002 did not oust the High Court’s jurisdiction. Nevertheless, the statutory scheme provided an appropriate route for challenging the Crown Court’s decision, namely an appeal to the Court of Appeal Criminal Division. Issuing fresh proceedings in the Chancery Division instead was an attempt to circumvent that scheme and was itself abusive.

5. The pending confiscation proceedings provided a further opportunity for the claimant, if properly advised, to make representations concerning the funds and deploy any relevant new evidence. Allowing the Chancery proceedings to continue would waste resources and risk bolstering the claimant’s position in those proceedings.

6. The claimant’s late application for an adjournment was refused. It was made more than an hour into the hearing, the proposed evidence did not address the abuse-of-process issue, and the claimant could raise relevant matters in the confiscation proceedings or any application for permission to appeal.

• Southwark Crown Court refused the claimant’s application to vary the restraint order and release the funds on 17 February 2016.
• High Court refused permission for judicial review on 7 June 2016; the application was found to be totally without merit.
• High Court (Chancery Division) struck out the present claim as an abuse of process under CPR 3.4(2).