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Judge condemns “cavalier approach” to freezing order application

Lambert: Application fell at first hurdle

A High Court judge has condemned a “cavalier approach” to an application to vary a freezing order, which would have allowed a man accused of defrauding a company of over £1m to sell assets to pay his lawyers.

Mrs Justice Lambert said she did not accept there was “no urgency” to the committal proceedings facing Mohammed Asif Khan, who was alleged to have a spent a “significant” amount of the money taken from North of England Coachworks on prostitutes.

Lambert J said the application “fails at the first hurdle” because Mr and Mrs Khan had “failed to adduce credible evidence (or indeed any evidence) that there are no others who may be willing to continue to provide financial assistance”.

The judge said that “there is a real prospect of alternative funding” from family members, in particular from Mrs Khan.

“After all, if she has the means to purchase his share in the family home (either from her own assets or with the assistance of a further loan from her father) then it follows that she may well be able to finance Mr Khan’s representation (and indeed her own).”

Lambert J said she also accepted the arguments of the company’s QC that “the evidence more generally is not cogent”, and there was no reliable third-party evidence of the value of assets.

“At best, this all suggests a cavalier approach to the application. At worst, a distinct lack of frankness.

“I also bear in mind that if the application were to be granted then it would inevitably lead to a delay in the committal proceedings of many months whilst the property is sold.”

The court heard in North of England Coachworks v Khan [2020] EWHC 1972 (QB) [1] that the freezing order was made as part of proceedings against Mr and Mrs Khan brought by Mr Khan’s former employer, North of England Coachworks.

Lambert J said the proceedings alleged that Mr Khan defrauded the firm of over £1m.

As part of his defence, Mr Khan produced a table, signed by his solicitor on his behalf and carrying a statement of truth, alleging that “a large number” of the payments made to prostitutes were paid either on behalf of the company or for the benefit of Mr Khan’s manager.

Lambert J said that, given the existence of “graphic text messages” from Mr Khan to the women, the company began committal proceedings against him, alleging dishonesty in attributing payments to prostitutes to “work-related purposes”.

She said that in May 2020, His Honour Judge Dight granted permission under CPR 81.18 to commit Mr Khan for contempt, listing the hearing for the end of this month, and giving directions in “the usual way”.

None of the directions were complied with because Mr Khan said he had “no funds” with which to pay his lawyer. A freezing order had been imposed on him and his wife in September 2019.

Lambert J said the application to vary it focused on the sale of three assets – a Rolex watch, a Bentley car and a house in Derbyshire.

Counsel for the company argued that Mr Khan had not provided independent third-party valuations for any of the assets, which had instead come from Mr Khan himself.

Lambert J dismissed the application to sell the three assets and to adjourn the committal proceedings.

“If private funding cannot be obtained for the purpose of representation at that hearing for any reason, then Mr Khan is entitled to public funding and I expect him to make strenuous attempts to obtain representation from one of the excellent firms who undertake publicly funded committal work.”

The judge allowed Mr Khan’s solicitor, Nicholas Brett, partner at London firm Brett Wilson, to address the court despite lacking higher rights of audience given the “particular circumstances of the case”.