IC Mutual Ltd & Ors v Raven & Ors

The First Claimant, IC Mutual Ltd (“IC Mutual”) was incorporated in the Bahamas, and subsequently re-registered in Grenada, where it was put into liquidation on July 25, 2002. Its liquidators are Mr Alistair Wood (Mazars LLP) and Mr Marcus Wide, PriceWaterhouseCoopers (W.I.) Inc.

The Second Claimant, Commercial Lending Corporation Ltd, formerly called IC Financiers Ltd (“IC Financiers”), a BVI company, was put into liquidation on July 25, 2002. Its liquidators are Mr Wood and Mr Wide.

The Third and Fourth Claimants, Imperial Consolidated Financiers Ltd (“Imperial Consolidated Financiers”), and Imperial Consolidated Ltd (“Imperial Consolidated”), both English companies, have been in administration since June 10, 2002. Their administrators are Mr Philip Lyon (Mazars LLP) and Mr Wood.

The Fifth Claimant, Imperial Phoenix Finance Ltd (“Imperial Phoenix Finance”), an English company, was also put into administration on June 10, 2002, and subsequently went into creditors’ voluntary liquidation. Mr Lyon is its liquidator.

Until they were placed in liquidation or administration the Claimants were part of a group of companies (“the Imperial Consolidated Group”).

The Claimants alleged that the First Defendant (“Mr Raven”) played an instrumental part, as the Imperial Consolidated Group’s International Sales Director Marketing Director, in a dishonest scheme operated by the Imperial Consolidated Group on investors between July 1999 and July 2002. The Second Defendant (“Mrs Raven”) is Mr Raven’s wife, and the Third Defendant is Mr Raven’s corporate vehicle Alternative Investments Strategies Ltd (“AIS”), which was incorporated in the BVI, and changed its name from IC Consultants Ltd (“IC Consultants”) to its present name in July 2002.

This is an application for the committal of Mr Raven for breaches of a disclosure order of Rimer J made on January 19, 2005. I shall set out the history of the application in greater detail below, but I shall summarise it at the outset so as to put in context the fact that there is almost no evidence from Mr Raven on the substance of the allegations.

On June 29, 2005 Warren J made a consent order to the effect that Mr Raven would be debarred from defending the main action unless he gave certain information to the Claimants, and provided them with authorities to seek information from certain financial institutions. Instead of giving the information and authorities, Mr Raven petitioned for his own bankruptcy, and allowed the Claimants to enter judgment against him on September 26, 2005.

The committal application was issued on September 1, 2005, with a return date of September 26, 2005. A 27 page affidavit was served in support of the application and the hearing before Lewison J took place on September 26, 2005. On the hearing date Mr Raven sought a two week adjournment in order to obtain legal advice and representation. Lewison J granted the adjournment on the basis that, having read into the case, it was very likely that Mr Raven would receive a custodial sentence, and therefore it was important that Mr Raven had the opportunity to obtain legal advice. Lewison J also stated that any application for a further adjournment would need proper evidence to support it.

The application came on for hearing on October 11, 2005, when Mr Raven asked for an adjournment (which I refused) to enable him to comply with the order of Rimer J. In the course of the hearing he also asked for the proceedings to be stayed pending the outcome of criminal proceedings against him, and instructed counsel in this respect to appear for him on the final day, but counsel did not make the application, having advised Mr Raven that it would have had no chance of success.

Mr Raven gave some oral evidence in circumstances on which I shall elaborate, but there has been no reply to the Claimants’ extensive evidence on this application. Indeed, the whole history of this matter shows a reluctance by Mr Raven to engage with the issues at all. Throughout, his conduct has shown that he is unwilling to answer the Claimants’ allegations: he withdrew an application to vary Rimer J’s order when faced with evidence from the Claimants; he went into bankruptcy and allowed the Claimants to enter judgment against him rather than give the Claimants information and supply them with authorities; he twice sought adjournments of this application, and put forward the hopeless argument that the application should be stayed pending the outcome of criminal charges which had not even been made.

In this section I shall set out the background, which is based on the Claimants’ uncontested evidence. Before 1998, Mr Raven had trained as an independent financial adviser in the United Kingdom, before working in the Middle East as a specialist in attracting investors into offshore mutual funds.

In July 1998, Mr Raven joined the Imperial Consolidated Group, which was then a loose association of world-wide finance companies and partnerships linked by the management of Mr Lincoln Fraser and Mr Jared Brook, two former hotel managers from Morecambe Bay, Cumbria. By the time Mr Raven joined them, Mr Fraser and Mr Brook had put one of their companies (Progressive Leisure Corporation Ltd) into insolvent liquidation, and another had been investigated by the US Securities and Exchange Commission. Mr Fraser and Mr Brook were later disqualified from acting as directors for five years as result of their involvement in Progressive Leisure Corporation Ltd.

Mr Raven described himself as the Imperial Consolidated Group’s International Sales Director from 1998 onwards, and also as its Marketing Director.

During 1999 the Imperial Consolidated Group proceeded to devise, set up and market a new mutual funds scheme based on the Claimant companies (“the Mutual Funds Group”).

IC Mutual was set up in 1999, and operated as an investment vehicle which attracted people and institutions world-wide to invest in its various mutual funds. IC Mutual used a network of brokers and introducers to attract funds for the purchase of redeemable shares in IC Mutual, with varying redemption dates. IC Mutual investors were typically promised unusually high rates of return with complete or high capital protection. The promised rates of return were based on the investment of their funds in purportedly successful underlying loan businesses run in the United Kingdom by the Mutual Funds Group.

The Mutual Funds Group scheme operated as follows. IC Mutual lent the investors’ funds to two BVI companies in the Mutual Funds Group, IC Financiers and IC Phoenix Limited (“IC Phoenix”), in exchange for loan notes. The BVI companies lent the investors’ funds to Imperial Consolidated Financiers and Imperial Phoenix Finance (“the UK companies”), which were then supposed to invest the funds in underlying loan businesses, which were to be sole means of providing the income necessary to meet IC Mutual’s promises to its investors.

The solvency of the Mutual Funds Group, and the viability of the scheme, depended therefore on the solvency of the UK companies. Both UK companies were wholly-owned subsidiaries of Imperial Consolidated.

The first five mutual funds launched in 1999 brought in approximately $37 million (£26.1 million), and a further two funds launched in the winter of 1999/2000 attracted another $22 million (£15.6 million). In the summer of 2000, another series of funds were launched, the Alpha Plus series, which proceeded to attract many more investors. The investors in the Mutual Funds Group included clients of major insurance institutions, such as Royal & Sun Alliance, Eagle Star International Life, Scottish Mutual International, and Allied Dunbar, who had endorsed the Mutual Funds Group products for their Personal Portfolio Bonds.

The Claimants’ case was that Mr Raven was an integral part of the Mutual Funds Group’s success in attracting funds, not only through his role in devising the schemes, but also as a salesman. He was responsible for 50% of IC Mutual’s total sales in 2000. Mr Raven was also involved in an attempt by the Mutual Funds Group to establish a scheme in Australia. This was prevented by the Australian Securities and Investment Commission, which in December 2000 procured undertakings from IC Mutual in Australia not to issue any shares on the basis of its prospectus.

The Mutual Funds Group’s senior management running the scheme had spent considerable sums of investors’ funds on overheads and what were claimed to be excessive salaries (Mr Fraser and Mr Brook received nearly $3 million each for the period), and commissions, and had not wisely invested the balance. The result was that by September 30, 2000 the Mutual Funds Group UK companies were insolvent, and the Mutual Funds Group scheme had ceased to be viable without obtaining new investors’ monies to pay off IC Mutual’s obligations to existing investors. These new investors were not told that their funds were being so used, and in turn further new investors were needed to satisfy IC Mutual’s obligations, with the net liabilities increasing consequentially.

Although $150 million of new funds came into the Mutual Funds Group, the financial position of the Mutual Funds Group continued to deteriorate throughout 2001. This was particularly noticeable from June 2001 when further funds began to dry up, and enormous investor liabilities remained to be paid. The Claimants say that this situation was compounded by a pronounced increase in the diversion of investors’ funds into companies connected to the officers of the Mutual Funds Group.

Mr Raven continued to actively promote and sell the Group’s products throughout 2001, with continuing involvement in its financial management.

On January 24, 2001 Mr Raven was appointed to the board of the main UK parent, Imperial Consolidated.

In April 2001, Mr Raven assumed a further role in the day to day management of IC Mutual’s affairs, when IC Mutual was apparently forced to leave the Bahamas jurisdiction by the Bahamian regulators, and lost Ansbacher (Bahamas) Ltd as its administrator. IC Mutual re-registered in Grenada, and an Imperial Consolidated company, United International Administrators Inc, of which Mr Raven was a director, became responsible for IC Mutual’s administration. Mr Raven was then responsible for the record keeping of IC Mutual, its monthly and annual reporting, the payment of yields and redemptions, and the payment of expenses, including commissions.

By June 2001 (shortly after Mr Fraser and Mr Brook had been formally disqualified from acting as directors of any UK companies), the Mutual Funds Group was experiencing severe cash flow difficulties. Mr Brook wrote to Mr Godley, the Mutual Funds Group’s chief accountant on June 14, 2001 suggesting curtailing lending (thus reducing the returns being generated by the investors’ funds), reducing redemptions (thus increasing liabilities), and attracting new capital by offering better rates (thus increasing liabilities, and worsening the performance of the Group).

Mr Raven then played a central role in the ensuing attempts by IC Mutual to prevent investors from seeking to redeem their investments, writing to this effect on IC Mutual headed paper as “Group International Sales Director”.

Mr Raven was also behind efforts to attract new capital by re-branding their products away from the Imperial Consolidated brand, with increased incentives for immediate investment.

By September 2001, the Group’s net liabilities had increased to over $100 million, before cash shortage and investor pressure brought the final collapse of the Mutual Funds Group with estimated net liabilities of about $180 million in June 2002.

Throughout this period, until September 30, 2001, Mr Raven, AIS and Mrs Raven, continued to receive substantial commissions on sales of IC Mutual’s products, totalling in this period $4.7 million. For example, in June and July 2001, when Mr Raven was seeking to persuade investors to stay in, he took at least $300,000 in commission personally.

Although the Mutual Funds Group was hopelessly insolvent by September 30, 2001, and had no prospect of being a viable investment scheme, the Group continued to attract new investments against the promise that the monies would be invested in income generating businesses. These monies were used to pay the claims of existing investors.

Notwithstanding this, Mr Raven continued to try to attract new funds into the Mutual Funds Group. There were drives for more funds launched in February and March 2002, coupled with appeals for disaffected existing investors to be patient for the receipt of their unpaid interest and capital.

Mr Raven continued to be paid large sums of money by way of commissions on investments in the Mutual Funds Group, until March 2002.

By May 2002, the infrastructure of the Mutual Funds Group had completely broken up, and, with regulators in Grenada, Ireland, the Isle of Man and the United Kingdom involved, the Mutual Funds Group UK companies went into administration on June 10, 2002, and the Caribbean companies went into liquidation in July 2002.

In September 2002, after the collapse of the Group, Mr Raven again attempted to persuade unpaid Mutual Funds Group investors at a meeting in Spain to stay with the Imperial Consolidated management team, and transfer their claims out of the insolvency process into a new fund, Property International. The Claimants have produced a transcript of that meeting. At that meeting, Mr Raven claimed that, inter alia: (1) a Sierra Leone granite mining operation – purportedly worth $600 million according to financial statements put forward by Mr Raven at the meeting - would provide the necessary returns when in fact that mine was not operational and worthless; and (2) he, Mr Raven, had also lost a lot of money in IC Mutual when in fact he had not but instead had received several million dollars in commission from it.

In respect of those investors who did so transfer their investments, Property International suspended payments to them in December 2002, and in June 2003 purported to transfer them back to the Mutual Funds Group.

The Mutual Funds Group had liabilities at its collapse of approximately $177 million (£121 million), with only about $33.5 million (£22.9 million) of assets to meet claims.

Of the Mutual Funds Group liabilities, approximately $101 million arose after September 30, 2000, being the date identified in the Particulars of Claim as that upon which Mr Raven was or should have been aware that the Mutual Funds Group was hopelessly insolvent.

The Claimants issued proceedings on January 5, 2005. The Claimants claimed against Mr Raven compensation for losses of $101 million to the Claimants dating from September 30, 2000 or (alternatively) some later date of his knowledge of the fraud (and lesser amount of losses) determined by the court, on the basis that either: (a) he was a de facto and/or de jure director of the individual Claimant companies, and in particular IC Mutual, and had breached his duties to such companies by knowingly permitting those companies to participate in the fraud (or negligently allowing them to participate when he ought to have known of the fraud), or knowingly or negligently allowing IC Mutual to loan its assets to the Mutual Funds Group UK companies when he knew or ought to have known that such companies were insolvent or of doubtful solvency; or (b) he assisted the directors of the Claimant companies in their fraud with knowledge of the fraud.

The Claimants also sought the return of the Claimed Assets, being an unknown amount of funds, totalling at least $5.8 million, received by Mr Raven, AIS, and Mrs Raven, after September 30, 2000 (or such later date as the court determined Mr Raven’s knowledge), being paid out as part of the fraud, or when Mr Raven knew or ought to have known that the Mutual Funds Group was insolvent or of doubtful solvency. Such liability was either based on knowing receipt or misfeasance by Mr Raven or AIS (as his corporate vehicle), or being a volunteer (in the case of Mrs Raven).

At the same time as the Claimants issued proceedings, the Defendants were invited to give undertakings to secure the Claimed Assets, and also the Defendants’ other assets up to $101 million (£69.3 million). The Defendants were also invited to give voluntary disclosure in relation to both.

On January 5, 2005 the Claimants issued an application which in effect sought a consent freezing/disclosure order. According to the Claimants, the Defendants declined initially to give undertakings in any meaningful form, and provided a bare witness statement of January 17, 2005. At the door of the court on January 19, 2005, the Defendants (advised by their solicitors Messrs Rubin Lewis O’Brien) consented to freezing orders, which were made that afternoon by Rimer J, requiring the disclosure requested by the Claimants.

Rimer J’s order required Mr Raven to swear by January 26, 2005 an affidavit listing the value, location and details of his world-wide assets up to a maximum value of $101 million, whether in his own name or not, and whether solely or jointly owned. It also provided that Mr Raven:

“must include in that affidavit a section addressing the circumstances of [Mr Raven’s] receipt of the Claimants’ property after 30 September 2000 referred to in paragraph 1(c) [an obvious error for 2(3)] above, and its current whereabouts, attaching all relevant documents.”

The property referred to in paragraph 2(3) was defined as “the Claimed Assets” and meant “any assets received by [Mr Raven] from the Claimants and/or Imperium Bank Limited on behalf of the Claimants and/or from any other third party on behalf of the Claimants after 30 September 2000, or any of [Mr Raven’s] assets within or outside of the jurisdiction of England and Wales now representing the same.”

On January 25, 2005, Mr and Mrs Raven swore affidavits of disclosure, supplemented by a one page fax from Mr Raven to the court of the same date. On February 16, 2005, Mr Raven swore a second affidavit. Mr and Mrs Raven signed various mandate forms authorising the Claimants to require specified banks to reveal information about the history of activity on their bank accounts.

On February 24, 2005, the Claimants’ solicitors served a letter detailing the inadequacies in Mr and Mrs Raven’s disclosure affidavits.

On March 11, 2005, Mr Raven swore a third affidavit, which (he said) was intended to give further evidence as to his assets and means, and to respond to the letter of February 24, 2005 from the Claimants’ solicitors.

On April 13, 2005, the Claimants’ solicitors served a list of questions about Mr and Mrs Raven’s disclosure.

On April 15, 2005, Mr and Mrs Raven issued an application to vary the terms of Rimer J’s order to allow them (i) to sell a specific Claimed Asset (Rose Cottage, Maerdy, Abergavenny), and other unspecified properties to fund their living and legal expenses; and (ii) to pursue another Claimed Asset (a debt apparently owed by Sidera Group of companies, to which I shall revert) using other Claimed Assets to fund such pursuit.

On May 6, 2005, Mr and Mrs Raven’s solicitors served their response to the Claimants’ letter of April 13, 2005, purporting to answer the Claimants’ queries about Mr and Mrs Raven’s disclosure.

The Claimants indicated their opposition to Mr and Mrs Raven’s application by a letter of May 17, 2005 on the grounds that (1) in relation to selling their properties, Mr and Mrs Raven had not been straightforward in disclosing their assets or the whereabouts of the Claimed Assets, and had not provided satisfactory evidence that they did not have other assets, undisclosed, from which to meet their living and legal expenses; and (2) in relation to pursuing the Sidera Group debt, Mr Raven’s disclosure in relation to this Claimed Asset was so confusing and ambiguous that Mr Raven should not be trusted to deal with it in any manner.

The Claimants’ solicitors wrote to the Defendants’ solicitors on May 24, 2005, enclosing two lists. The first set out the earlier questions and responses, together with what they said were the deficiencies in the responses. The second list was a list of further questions. There was no response to this letter.

On June 24, 2005, the Claimants made an application for an order that, unless the Defendants responded to the questions contained in the lists supplied with the letter of May 24, 2005, the Defendants be debarred from defending the claim.

On June 27, 2005, Mr and Mrs Raven’s solicitors agreed to drop their application to vary the order of Rimer J, and consented to an unless order in the form required by the Claimants subject to there being no order in relation to costs. On June 28, 2005, a draft unless order, including a schedule setting out precisely what the Defendants had to do, and by when, to comply with the order, was sent by fax to the Defendants’ solicitors. Mr Taaffe, Mr Raven’s solicitor, confirmed by e-mail that he had been instructed by his clients to agree the order in the terms of the draft supplied, and he faxed a signed copy of this order to the Claimants’ solicitors.

The consent order was made by Warren J on June 29, 2005. The order was that unless the Defendants responded to the Claimants’ questions contained in the two lists accompanying the Claimants’ solicitors’ letter dated May 24, 2005 in the manner and timescale identified in the final column of the lists attached to the order as Schedule A, including signing authorities to various financial institutions in the forms set out in Schedule B, the Defendants would be debarred from defending the claim and the Claimants would be at liberty to enter judgment. Directions were given for the further conduct of the action if the Defendants were to comply with the order, including the filing of a defence by August 15, 2005. The deficiencies in the first list were generally to be remedied within 21 days, and the authorities to financial institutions were to be supplied within 7 days.

The order was served on the Defendants’ solicitors on June 30, 2005 by fax, but no signed authorities were received from Mr and Mrs Raven by Wednesday July 6, 2005, when they were due.

Instead, Mr and Mrs Raven paid for legal advice to prepare Points of Defence, received by the Claimants’ solicitors on July 4, 2005; and petitioned for their own bankruptcies on July 5, 2005, orders being made on that same day.

As I have said, on September 1, 2005, the Claimants issued the present committal application, with a return date of September 26, 2005. The Claimants served a 27 page affidavit in support and the hearing before Lewison J took place on September 26, 2005. On that hearing Mr Raven sought and obtained a two week adjournment from Lewison J in order to obtain legal advice and representation. Lewison J granted the adjournment on the basis that, having read into the case, it was very likely that Mr Raven would receive a custodial sentence, and therefore it was important that Mr Raven had the opportunity to obtain legal advice. Lewison J also stated that any application for a further adjournment would need proper evidence to support it.

At the same time, the Claimants issued an application for final judgment following Mr Raven’s failure to provide signed authorities by July 6, 2005, in accordance with the consent order of June 29, 2005. On September 26, 2005, on the failure of the Defendants to provide 6 signed authorities by 6 July 2005 to various institutions to provide information in accordance with an order of Warren J of June 29, 2005, final judgment was entered against the Defendants with damages to be the subject of an enquiry. It was also declared that the Defendants held any sums received from the Claimants on trust for them.

In an interview with Mr Bowen, Mr Raven’s trustee in bankruptcy (“the trustee in bankruptcy”), on September 20, 2005, Mr Raven purported to answer the questions in the lists attached to the Claimants’ solicitors’ letter of May 24, 2005 and in Schedule A to Warren J’s order. The Claimants say that a review of his answers reveals the same mixture of inconsistencies, evasions, and promises of further documentation which Mr Raven has employed since January 26, 2005 to prevent the Claimants from tracing his assets.

The adjourned committal application came on for hearing on October 11, 2005.

On October 10, 2005 Messrs Thomas Graham, by then Mr Raven’s solicitors, ceased representing him, and on the morning of the first day of the hearing they wrote to the court to say that they were not able to attend the court, as they were without funds, but would still endeavour to assist him on a pro bono basis. They said they had advised Mr Raven to attend court, and asked the court to give consideration to the following matters: Mr Raven had sought to obtain legal aid and had been refused; he had sought financial assistance from the trustee in bankruptcy but had been refused; they understood that the trustee in bankruptcy had confirmed that Mr Raven had provided full cooperation to him; insofar as there were any breaches of court orders “Mr Raven is more than happy to comply with the same and put such information before the Court in respect of which he has knowledge of and in respect of which he is capable of providing”.

In the circumstances they asked the court to adjourn the proceedings for 28 days to enable him to comply with such court orders insofar as he could.

On the first day, October 11, Mr Raven appeared. On the afternoon of the first day I refused a request for an adjournment. Mr Raven told me that he had spoken to a criminal lawyer during the short adjournment and was concerned that he might prejudice himself, and requested that the proceedings be stayed until after the conclusion of criminal proceedings.

On the second day, October 12, Mr Evenden of Richard Nelson Business Defences, Cardiff, telephoned my clerk to say that he was acting for Mr Raven in criminal proceedings and that he was concerned that if Mr Raven were to give evidence in the present matter, it might be prejudicial to Mr Raven in the criminal proceedings.

Subsequently Mr Evenden sent a fax to me to say that his firm acted on behalf of Mr Raven in relation to “criminal proceedings” and that Mr Raven was currently on bail to Louth police station in Lincoln having been arrested by the Serious Fraud Office on January 20, 2005. He asked the court to consider granting his firm costs from central funds to instruct counsel to make a formal application. I asked my clerk to write in reply to ask whether Mr Raven had been charged with any offence or offences, and if so, what was the nature of the charges and the current status of the criminal proceedings. In reply Mr Evenden stated that Mr Raven had not been charged but had been arrested, and had a right to maintain his silence pursuant to Article 6 of the European Convention on Human Rights.

Mr Fraser finished his submissions on Wednesday, October 12 and I adjourned the matter until Friday, October 14, when I indicated that Mr Raven could, once he had taken advice, make an application for the matter to be stayed. On Thursday, October 13, Mr Evenden expressed concern to my clerk that Mr Raven, in giving evidence in the hearing, might be prejudiced in any criminal proceedings.

At the outset of the hearing on October 14, 2005, Mr Timothy Kirk of counsel, instructed by Mr Evenden (who was present) appeared for Mr Raven. Mr Kirk said that he was representing Mr Raven only in relation to the relationship between the present proceedings and the possible criminal proceedings. Mr Kirk said that, having examined the case law on the subject, he had taken the view that there was no sustainable argument for a stay of the civil proceedings. That was plainly correct.

Mr Kirk said that he had discussed the privilege against self-incrimination with Mr Raven and that Mr Raven had indicated his intention to answer questions as fully as possible. Mr Kirk withdrew, but Mr Evenden remained throughout the day.

I made it clear to Mr Raven that he was not obliged to give evidence at all, but if he chose to deal with any questions of fact, very little significance could be attached to his statements unless he went into the witness box, and was prepared to be cross-examined.

The Claimants say that Mr Raven’s disclosure affidavits are aimed at proving the following:

The Claimants submit that the breaches relied on, combined with the general factual background, contribute to the overall conclusion that the picture Mr Raven seeks to paint is false.

I invited the Claimants to concentrate on what they submitted were the most serious, and clearest, breaches of Rimer J’s order. The list of Mr Raven’s acts of alleged contempt as formulated in the Claimants’ closing submissions was as follows:

In Gulf Azov Shipping Co Ltd v Idisi [2001] EWCA Civ 21 the Court of Appeal confirmed that the standard of proof applicable to contempt in civil proceedings is that which applies in criminal proceedings and therefore the applicant must make the court sure of the facts which are alleged to constitute the contempt. When the court is concerned with the circumstances in which a contempt has been committed and thus with the gravity of the defendant’s conduct, it must be satisfied to the point of being sure of any matters which it would regard as adverse to the defendant or which would tend to lead it to view his action in a more serious light and so effect the view of the appropriate penalty.

Lord Phillips MR said (at paragraph 18) that it was not right to consider individual heads of contempt in isolation. They were details on a broad canvas. An important question when that canvas was considered was whether it portrayed the picture of a defendant seeking to comply with the orders of the court or a defendant bent on flouting them. Individual details of the canvas should be informed by the overall picture, but each head of contempt must be established beyond reasonable doubt.

As will appear, the matters on which the Claimants relied in submission were not in all respects the same as in their amended application notice. It is well established that the applicant is confined to the grounds set out in the application: Arlidge, Eady and Smith, Contempt, 2^nd ed. 1999, para. 15-20.

Although the allegations in the Claimants’ final list covered the same ground as the allegations in the application notice (as amended), they are not quite identical in their formulation. For the reasons given above, I shall confine myself to considering the allegations in relation to these matters as formulated in the application notice. I shall deal with them in turn.

I should also preface my consideration of the detailed points with these observations. There are a number of matters which, in my judgment, seriously affect Mr Raven’s credibility. First, as I will show, there are numerous inconsistencies in his evidence. Second, Mr Raven has never sought to answer the allegation that the transcript of the September 2002 investors’ meeting shows Mr Raven misleading investors as to (a) his own losses in the Imperial Consolidated fraud (b) his own connection to the new Property International fund; and (c) the purported $323 million of assets owned by the new Property International fund. He has never suggested that the transcript is not genuine, or that it is not his words which are transcribed. Third, his evidence to me in respect of the alleged storage of his documents was inconsistent and wholly incredible. Mr Raven was asked by Mr Fraser, for the Claimants, as to why so little documentation relevant to Rimer J’s order had been disclosed by Mr Raven personally (as opposed to by his banks, his Jersey administrators, or allegedly held by his Spanish accountants). Mr Raven responded that this was because his personal documents were in storage and he could not get access to them because he owed money for storage charges. He elaborated that the documents were with a storage company in Spain. When I asked for further detail, Mr Raven indicated that they were in or under a friends’ apartment in Spain. Mr Raven then accepted that such an arrangement could not involve storage charges. Mr Raven sought then to make good his original statement by claiming that in fact there was a facility which stored his personal documents in South Wales to which he owed money, but he was unable to supply any details, claiming incredibly that only his wife knew. In the circumstances, I accept the submission that Mr Raven’s first statement concerning the alleged storage of his personal documents was clearly a deliberate falsehood told on oath to explain the lack of any documents provided by him personally to the Claimants.

In the witness box Mr Raven was full of self-pity and sought to portray himself as an innocent victim who was unable to defend himself because of lack of representation, and unable to comply with Rimer J’s order through lack of access to documentation which was in storage or with former professional advisers. I am satisfied that Mr Raven has no respect for the truth.

I accept the Claimants’ submission that Mr Raven is not a simple person unversed in commercial and financial matters, but in fact was a senior officer in the world-wide operations of the Imperial Consolidated Group who devised the original schemes, and a sophisticated financial operator in his own right with significant experience in running international accounts and companies in many different jurisdictions.

The affidavit of Mr Lyon in support of the freezing injunction dated January 13, 2005 stated (paragraphs 31 to 32) that Mr and Mrs Raven used 12 offshore bank accounts (in their joint names or in the name of IC Consultants, the Third Defendant under its former name) for 4 different currencies in the Channel Islands, and Mr Raven used a Guernsey based administration company, Trident Trust Co (Guernsey) Ltd (“Trident Trust”) to administer the bank accounts of IC Consultants, the Third Defendant. By June 24, 2005, when Mr Lyon swore an affidavit in opposition to the Defendants’ application to vary the orders of Rimer J, the Claimants had evidence that Mr and Mrs Raven controlled more than 40 bank accounts.

Breach of the order to swear an affidavit disclosing the value, location and details of Mr Raven’s worldwide assets, by failing to include details of an Abbey National bank account in Gibraltar, and breach of the order by refusing to co-operate with the Claimants by providing a signed authority, leading to the conclusion that his affidavits have failed to disclose current assets which have passed through this account.

In paragraph 31 of his first affidavit, Mr Raven said that he attached a statement of active accounts, and said :

“These are the only active accounts of which I have knowledge about although the Imperial Consolidated group may have operated more than those identified.”

He went on:

“32.

For the sake of good order I confirm that I know of no further accounts which hold funds (to which I am legally or beneficially entitled) and which are not disclosed.

33.

I have voluntarily agreed to sign bank mandates and will do so in relation to any accounts identified by the Claimants over which I have control.”

The schedule of active accounts in the exhibit referred to the following: (a) an account in the name of Mr and Mrs Raven in HSBC Hong Kong, with a balance equivalent to about £2,016; (b) two accounts in the name of Mr and Mrs Raven in Barclays Bank plc, one overdrawn by about £50 and the other with a nil balance; (c) two accounts in the name of Mrs Raven at Barclays Bank plc, one with a balance of about £28 and the other with a nil balance; (d) a joint account of Mr and Mrs Raven at HSBC Jersey, with a balance of about £7,409; (e) an account of Mrs Raven at HSBC Jersey with a balance of about £403; (d) and an account of Mr Raven at Barclays Bank Spain, with a balance of £1,800.

Mr Raven also sent with his affidavit a fax for the attention of the court manager in which he said: “The Abbey National account in Gibraltar has also been closed for some time.” There was no reference to such an account in his affidavit or in the exhibits.

On February 24, 2005 the Claimants’ solicitors wrote to Mr Raven’s solicitors, Rubin Lewis O’Brien, to say:

“In respect of the accounts revealed in his one-page fax, Mr Raven does not give details of his Abbey National Gibraltar account (no branch, sort code or account number), nor is any of the information in the one-page fax deposed to.”

Mr Raven swore his third affidavit on March 11, 2005. In paragraph 1, he said that he was giving further evidence as to his assets and means pursuant to the order of Rimer J and in particular to respond to the letter of February 24, 2005 from the Claimants’ solicitors. Under a heading “Accounts” he referred to some pages in the exhibit, none of which dealt with the Abbey National account.

But he included in the exhibit to his third affidavit (but with no mention in the affidavit itself) a letter dated September 6, 2001 from Abbey National Offshore, Jersey, addressed to Mr and Mrs Raven stating that 3 accounts had been opened in Jersey (not Gibraltar).

Mr Raven also exhibited to his third affidavit an e-mail of April 4, 2002 from Mr Leach, managing director, Equity International Group, to Mr Heinemann, at Unibank, in connection with the opening by Mr Raven of an account with Nordea Bank (which is part of the Unibank group). Mr Leach told Mr Heinemann that (a) Mr Leach had known Mr Raven for approximately 10 years; (b) Mr Raven had accumulated savings of approximately £2 million; and (c) “the primary reason for opening the account [with Nordea] is because, at the present time, deposits are split between Abbey National in Gibraltar and HSBC in Jersey and inheritance tax planning is now a serious consideration” for Mr and Mrs Raven.

On April 13, 2005 the Claimants’ solicitors sent a list of preliminary questions and request for further information dated April 12, 2005. One of the points (point 11) was a request to provide the details of the account held with Abbey National in Gibraltar (branch address, sort code, account number) so that they could prepare an appropriate form of authority.

On May 6, 2005 Mr Raven’s solicitors, Rubin Lewis O’Brien stated in a fax (paragraph 11) that their clients believed that they had already provided details of the Abbey National account in previous correspondence, and asked whether the Claimants’ solicitors were perhaps referring to the Abbey National Account details disclosed on page 146 of the exhibits in Mr Raven’s third affidavit (i.e. the letter from Abbey National Offshore, Jersey, dated September 6, 2001).

On May 24, 2005 the Claimants’ solicitors responded to Mr Raven’s solicitors to say that “for the second time, Mr Raven has avoided giving details of the Abbey National account in Gibraltar.”

The unless order of June 29, 2005 required the Defendants to provide details of all bank accounts held in Gibraltar, including the bank account names, numbers and sort codes, and to provide an authority from Mr Raven to gain access to bank statements and other documents relating to the accounts.

The schedule to the witness statement of the trustee in bankruptcy indicates that Mr Raven told him on September 20, 2005 that the only account which Mr Raven held in Gibraltar was an Abbey National account, and that he believed that the application with the Jersey details on was the same account and that this may have been a processing centre.

In evidence, Mr Raven claimed to have only ever had one Abbey National account, and believed there had been some confusion. The Abbey National office in Gibraltar was a branch office of the Abbey National office in Jersey/Guernsey. He had given the bank statements and account number to the Claimants and all the information disclosed referred to only one account in Abbey National, although he thought that the account may be split into a current and savings account. There was not an account in Gibraltar and one in Jersey, and everything was part and parcel of the one account. The trustee in bankruptcy was currently preparing authorities for Mr Raven to sign which would allow the trustee in bankruptcy to have access to information on this account, and he would sign these authorities as soon as he received them.

I asked Mr Raven whether he had not already agreed to provide this information before the hearing which took place in June 2005 before Warren J. Mr Raven’s explanation was that the Official Receiver in Cardiff had advised him that the civil proceeding would be stayed once he had declared himself bankrupt and that was why he did not respond to the Claimants’ questions. Mr Raven said he had also been advised by his solicitors that legal proceedings would be stayed upon bankruptcy, and that he had simply followed the advice he was given. Mr Raven added that the solicitors’ advice was not the only reason the bankruptcy took place.

I explained to Mr Raven the concept of legal privilege and told him that if he chose to repeat that the legal advice he was given was his excuse for non-compliance, Mr Raven would be waiving this privilege, and that he might be ordered to produce all documents relating to the legal advice he was given regarding this matter. I asked Mr Raven to decide whether he wished to waive his legal privilege, and he said that he did not wish to do this. Mr Raven said that his legal advice was verbal, and that he did not wish to rely on it.

In cross-examination, he was asked to confirm whether it was his evidence that the reference to an Abbey National account in Gibraltar in his one-page fax attached to his first affidavit was meant to be a reference to the Jersey accounts disclosed to the Claimants. Mr Raven confirmed this.

As regards the e-mail of April 4, 2002 from Mr Leach to Mr Heinemann of Unibank, Mr Raven accepted that he and Mr Leach had known each other for a period of 10 years, but stated that he was not close to Mr Leach. The e-mail was used to assist Mr Raven to open the Nordea Bank account. Mr Raven said that the reference to £2 million was a mistake on the part of Mr Leach, since at that time his account only had £1.2 million in it. Mr Raven reiterated that there was only the one account which he opened in the Gibraltar branch and explained that this bank account relates to the account in Jersey/Guernsey.

I am satisfied that Mr Raven has been in breach of Rimer J’s order that he disclose the value, location and details of Mr Raven’s worldwide assets, by failing to include details of the Abbey National bank account in Gibraltar, and that he has failed to disclose current assets which have passed through this account.

My reasons for this conclusion are as follows. First, Mr Raven gave no details of the Abbey National account, nor what monies had passed through it, in any of his affidavits, nor did he answer the Claimants’ solicitors’ consistent requests for the information from April 13, 2005. Second, on Mr and Mrs Raven’s instructions, their solicitors wrote on May 6, 2005 that their clients believed that they had already provided details of the Abbey National account in previous correspondence, and asked whether the Claimants’ solicitors were perhaps referring to the Abbey National account details in the letter from Abbey National, Jersey, dated September 6, 2001. That disingenuous reply was plainly written on instructions. Thirdly, as regards credibility, Mr Raven’s attempt to suggest that the letter of September 6, 2001 from Abbey National Offshore, Jersey, addressed to Mr and Mrs Raven and stating that 3 accounts had been opened in Jersey (not Gibraltar) was indeed a reference to the Gibraltar account, because Gibraltar was a branch of Jersey, was preposterous. Mr Raven has enormous experience in the operation of international bank accounts, and he referred to this account as a Gibraltar account in the one page fax attached to his first affidavit. His associate, Mr Leach, referred to the account, on Mr Raven’s instructions, as an account in Gibraltar in his e-mail of April 4, 2002. I am satisfied that his statements to me and the trustee in bankruptcy that there was only one account with Abbey National, and that that was in Gibraltar, are untrue. Nor do I believe his evidence that he had not given the information because he had been advised by the official receiver and by his solicitors that the effect of the bankruptcy order was to relieve him of responsibility.

Breach of the order to set out in an affidavit the circumstances of the receipt and current whereabouts of the Claimed Assets, attaching all relevant documentation, by failing to provide all or any relevant documentation in relation to the $1.1 million of Claimed Assets allegedly spent on Mr Raven’s overheads.

As I have said, “Claimed Assets” were defined in Rimer J’s order to include any assets received by Mr Raven from or on behalf of the Claimants after September 30, 2000.

Mr Raven accepts the Claimants’ allegation that the Defendants received $5.8 million in commissions, although he has, it seems, been careful not to say what the amount actually received was. He claimed in his third affidavit that of the $5.8 million (a) he was charged $150,000 in fees and bank charges; (b) $1.938 million was paid out as broker’s commissions by Trident Trust, which administered IC Consultants (now AIS, the Third Defendant) in Guernsey; (c) $1 million was spent on running the Imperial Consolidated SL office (especially in paying a basic salary and bonus commission to 10 named broker consultants). He exhibited what was described as a report by Trident Trust showing commissions paid to brokers.

The Claimants’ case is that the figure is largely made up of salaries and commissions paid to a maximum of ten specified staff. As Mr Raven has stated that broker consultants (of which he lists only five) were paid a basic salary of $5,000, or $25,000 in total, then the majority of the $1m is supposed to be accounted for by broker commissions to staff. However, of the ten staff identified, seven of them have their commissions accounted for under the list of $1.938m brokers’ commissions supplied by Trident Trust. Accordingly, Mr Raven is apparently trying to use double-counting to inflate his expenditure figures.

In his first affidavit (paragraphs 7 to 10) Mr Raven accepted that during the period 1999 to September 2002 remittances were made to accounts controlled by himself in the approximate amount of US $5.8 million. This was a gross figure, and from this amount it was necessary to account to brokers who actually sourced and introduced clients. He relied on a network of over 200 brokers to actually introduce sales. Brokers’ commissions consumed the bulk of all payments to the Defendants, and he believes that the Defendants received net considerably less than half the US $5.8 million total in the period from 1999 to September 2002.

He says that he had advised the Claimants’ solicitors that the bulk of the documentation relating to brokers’ commission was held in Spain. He had expressed a willingness to disclose this further documentation within a reasonable period of his travelling to Spain. He expected to travel to Spain by no later than mid-February 2005.

In his third affidavit (paragraphs 12 to 21) he says:

The exhibited report prepared by Trident Trust showing commissions paid to consultants includes several (at least 7) of those on Mr Raven’s list of employees to whom, he claimed, he had made payments of salary and bonus commission.

In their letter of May 24, 2005 the Claimants’ solicitors wrote to Mr Raven’s solicitors to say that Mr Raven estimated his total office cost to be approximately $1 million and total commissions paid to be $1.938 million. He listed 10 members of staff employed at the peak of Imperial’s trading, and 5 of them were described as broker consultants, who earned only $5,000 per annum plus commissions. The broker consultants’ salaries at their peak therefore equated to $25,000 per annum. They asked what other costs were included within his $1 million office cost expenses.

There was no response, and details of the office expenses were required in the schedules to Warren J’s order of June 29, 2005.

In his answers to the trustee in bankruptcy Mr Raven said that when the Imperial Consolidated Group allowance stopped he continued to pay running costs personally. The sum includes unpaid commissions which needed to be paid to retain staff, and the figure may also include commissions owed to Mr Raven. Mr Raven told the trustee in bankruptcy that the records were in storage, that the storage costs were owed, so that Mr Raven might not be able to access them.

Mr Raven’s oral evidence was that Trident Trust’s role was to run a company called Offshore FS Ltd, which in turn ran all of the accounts and sorted out all of the monies for the Imperial Consolidated Group and in particular the commissions that were paid to the brokers and the commissions that were paid to Mr Raven. All the commission payments ran through Trident Trust, which would have extensive information and documentation to prove this. The expenses were expenses of the company IC Mutual SL, a Spanish company, which were dealt with directly by that company. The money was transferred to this company from Guernsey by Trident Trust, or perhaps directly from the accounts of Mr and Mrs Raven.

The consultants were employees who were paid commission in addition to their normal remuneration when they bought business to the company, for example, the company administrator in Spain, Catriona Hogan, who introduced a client to the company.

The lease was in the name of IC Mutual SL and he continued to pay the lease from his own funds which were generated by the commission that he had earned. Mr Raven stated that all of the Spanish information was in storage but that the company information had been preserved. He was in the process of signing letters of authority for the trustee in bankruptcy, allowing him to obtain all of these records from the accountants in Marbella, and comprehensive records existed that could justify and explain these consultants’ arrangements but they were in storage. He could not get them out of storage because there were outstanding bills owed to the company storing his documents. Approximately £60 a month or £1,200 was now owed to this storage company. Mr Raven claimed that he had asked the trustee in bankruptcy for funds in order to get access to the records so that he could rectify the situation, but the trustee had refused this request.

Mr Raven admitted he had not originally provided the documents as requested by the Claimants and justified this on the grounds that they were extensive and bureaucratic in nature. Mr Raven said that experts would have had to organise these documents into a comprehensible manner so that they could be understood for the purposes of this case, he said that if he had had the resources to organise this he would have provided the information.

My conclusions are these:

Breach of the order to swear an affidavit disclosing the value, location and details of Mr Raven’s worldwide assets, by making statements that he had not been able to obtain an income following the Imperial Consolidated collapse (first affidavit, para 39) and that by virtue of the collapse of the group and attendant publicity, he had been unable to work to earn a living (third affidavit, para 26), which were false in the light of the existing evidence and his refusal to respond to questions or provide appropriate authorities or documentation in relation to Fund Partners International; Resource Strategies SL; Sovereign; Sidera; Select Design; and Brewin Dolphin Securities.

The essence of the allegation is that Mr Raven’s statement that he had not been able to obtain an income after the Imperial Consolidated collapse in June 2002 is untrue. The entities mentioned are examples of the evidence on which the Claimants rely. I have to be satisfied beyond reasonable doubt, or sure, in relation to the charge as a whole, and not in relation to each of the examples. I will take them in turn.

A hire purchase agreement dated November 10, 2003 for a Ford Galaxy stated that Mr Raven had been employed full-time by Fund Partners International for 4 years 7 months. In response to a question put by the Claimants’ solicitors accompanying their letter of April 13, 2005, Mr Raven’s solicitors wrote on May 6, 2005 to say that Fund Partners International was the name of the company under which Mr Raven was trading under at the time. In their list of questions of May 24, 2005 the Claimants’ solicitors said that this answer contradicted paragraph 26 of his third affidavit stating that by virtue of the collapse of the group and the attendant publicity he had been unable to work to earn a living. On September 20, 2005 Mr Raven told the trustee in bankruptcy that Fund Partners International was a company set up in Spain, which might still be registered, but which had never traded.

The Claimants say that the hire purchase agreement and the letter from Mr Raven’s solicitors of May 6, 2005 show that his statement in his third affidavit of March 10, 2005 that he had no income since June 2002 is false.

In evidence, Mr Raven said that the records of Funds Partners International were with his accountants in Marbella. Mr Raven was not sure if this company was registered as a company. It might simply be registered as a follow-on trading name for IC Consultants SL (which, he said, was permitted by Spanish law). Any money running through this company’s bank accounts would have come from his personal accounts. He was unsure but believed the records would show that there was not a significant amount of money going through the company. IC Mutual SL was trading as IC Consultants SL, which he set up to market core Imperial Consolidated Group products worldwide. He believed that it would continue to do this after the administration, as it was part of the overall plan that the Imperial Consolidated Group would go into administration and then come out.

In cross-examination, Mr Raven said that he could not remember whether the company had bank accounts and that the Spanish accountants would have this information. When he was asked why he had not provided the documents in January, Mr Raven said that he could not get the documents as his accountants had them and that as he owed them money they would not release the documents. He estimated that he owed the accountants approximately €20,000. It was put to him that this reason was not the reason given by Mr Raven in his second affidavit for not providing relevant documents; the reason given there was that Mr Raven was unable to locate the documents. It was put to him that if Mr Raven did owe the accountants €20,000 this should have been stated in the schedule of his second affidavit. Mr Raven said that he had never received an invoice and that this was a bill communicated to him orally by one of the partners.

I am satisfied that Mr Raven’s oral evidence was contradictory and untruthful. The statements in the hire purchase agreement that he was employed by Fund Partners International and the statement by his solicitors in their letter of May 6, 2005 that he was trading as Fund Partners International at that time are inconsistent with the version put to the trustee in bankruptcy that Fund Partners International had never traded.

If this matter stood alone it would not show that Mr Raven had lied in saying that he had no income since June 2002, because there is no evidence of income from this source.

In his letter to the court manager which accompanied the exhibit to his first affidavit Mr Raven said there might “be an account for a company called Resource Strategies in Spain but again there was no money in this account.” The account would be at Banco Pastor in Marbella.

At paragraph 13 of their questionnaire of April 12, 2005 the Claimants’ solicitors asked Mr Raven to explain his involvement and/or dealings with Resource Strategies SL. The answer given by Mr Raven’s solicitors on May 6, 2005 was that Resource Strategies “was set up for a sales venture which never took off and the company never got off the ground.”

The Banco Pastor bank statements for the Resource Strategies SL account are available for the period from January 2, 2002 to December 2, 2003. They show regular monthly social securities payments in modest amounts.

In their questionnaire of May 24, 2005 the Claimants’ solicitors pointed out that the bank account at Banco Pastor showed regular activity every month from February 2002 until June 2003, and throughout this time numerous bills were paid including numerous tax payments. The activity was not consistent with a company which had not traded. An explanation was asked for.

In evidence Mr Raven said that Resource Strategies was to market one specific financial product. To the best of his recollection, some business was done in Japan through the Japanese office but no business had been done through the Spanish company. The social security payments related to one employee, and the records in storage could back this up.

In cross-examination, in response to the question what from what account the wages were paid, Mr Raven said he could not answer this as all issues of social security and wages were handled by Catriona Hogan. It was put to him that Resource Strategies must have had another account which was used to pay out wages and receive funds which Mr Raven had not disclosed. Mr Raven said there possibly was a different bank account used for these purposes. It was put to him that there was only one employee of Resource Strategies and therefore Mr Raven must know how the salary of this employee was paid. Mr Raven said he did not know but the accountants would. When asked what funds were used to pay the employee and social security, Mr Raven replied that the funds came from his account.

Mr Raven’s solicitors’ statement on May 6, 2005 that “Resource Strategies was set up for a sales venture which never took off and the company never got off the ground” was inconsistent with the Resource Strategies’ bank statements for the period February 2002 until June 2003 which show regular monthly activity including tax payments, and there has been no explanation for this inconsistency. He did not explain why Resource Strategies was paying wages and social security and why its bank account in Spain was active if it never traded. Mr Raven admitted that Resource Strategies did market products successfully in Japan, although he claimed that no business had been done by him in Spain.

On this aspect Mr Raven’s account was very unsatisfactory, but there is no clear evidence that he had an income from Resource Strategies.

The Claimants’ evidence is that Sovereign Trust (Isle of Man) Ltd (“Sovereign”) is a company specialising in setting up companies in offshore jurisdictions to hold property in France and Spain. Mr Raven’s first affidavit contained a schedule of loans/liabilities, including what was said to be an outstanding bill “Sovereign (Company Costs)” of $7,895.24. On April 13, 2005 the Claimants’ solicitors asked why this sum was owed. In response, Mr Raven’s solicitors stated on May 6, 2005 that this sum was due to Sovereign for the setting up of two companies relating to failed ventures.

Mr Raven supplied an invoice from Sovereign dated December 30, 2004 “Re Reyes Company Limited” for $3,218.75 addressed to Mr Raven.

In evidence, Mr Raven stated that two companies had been set up through Sovereign. The formation expenses were high because both of the companies were hybrid companies as opposed to standard off-the-shelf companies. Mr Raven said that he has signed an authority allowing the trustee in bankruptcy to get access to information regarding this matter. He was confident that the information will confirm that the companies never traded and that no money ever went through the companies’ accounts.

In cross-examination, Mr Raven accepted that Sovereign did specialise in setting up offshore companies in France and Spain. In answer to the question regarding what property he had in France or Spain, Mr Raven said that he could not recall having any property in these countries, and said that Sovereign also specialised in other types of transaction (which he did not identify). It was put to him (and he had no answer) that he should be able to recall whether he had property in France or Spain or not.

The Claimants’ case is that Mr Raven has refused to provide any explanation for Sovereign’s involvement. None of Mr Raven’s assertions have been backed up with any relevant documentation apart from the invoice, which does not answer the Claimants’ concerns about undisclosed assets. Given the possibility that Sovereign has set up a structure whereby Mr Raven can hold property offshore, this is of great concern. Mr Raven’s refusal to respond in these circumstances can only lead to the conclusion that Mr Raven’s affidavits of disclosure about his assets are false and in contempt of court.

I was informed that, following the hearing on October 14, 2005, Mr Raven supplied an authority to enable the Claimants to deal themselves with Sovereign Trust, and that the Claimants are now engaged in the process of obtaining documents from Sovereign Trust.

Mr Raven’s evidence was evasive and unsatisfactory, but I am not satisfied that there is evidence of income.

This aspect is dealt with below.

At paragraphs 26 to 28 of his first affidavit Mr Raven said, in the context of disclosure of his assets, that Mrs Raven had invested in a company called Select Design Technologies Ltd. She had invested US$140,000 to acquire about 3.8 million ordinary shares. It was an unlisted public company involved in the concept development of a vehicle automated transmission technology called Smartmatic. Mr and Mrs Raven believed that the value of the investment was uncertain, and no dividends had been paid.

At paragraphs 40 and following of his third affidavit he said that he and Mrs Raven had decided to invest in Select Design Technologies Ltd because he believed that it was potentially a very viable investment. The shares were held in the name of Mrs Raven because, for regulatory reasons, he could not hold shares in his own name following the collapse of the IC Group. The shares were originally registered in the name of Offshore FS, a company which was run by Trident Trust in Guernsey. The shares were transferred into Mrs Raven’s name when Trident Trust withdrew their services and insisted that they transfer the shares into another name. Little or no value was placed on the shares because the company was not listed. The Claimants were free to obtain whatever independent valuation they wished, and his present view that the shares had little value was guided by the fact that the Australian Securities and Investments Commission had issued an interim stop order on the Select Design Technologies Ltd information statement dated August 28, 2001.

The other documents which have a bearing on this aspect are these. First, Mr Le Tissier of Trident Trust wrote a memorandum on January 21, 2003 of a telephone conversation between him and Mr Raven on that date, in which Mr Raven had reported that (a) Trident Trust should have received share certificates from Select Design Technologies Ltd for holding within the offshore company of the same name; and (b) Mr Raven had taken such shares in recognition of his involvement in that company, and would be trading them privately over the next couple of months, needing Trident Trust to liaise with the company registrar on each occasion.

Second, a letter of March 31, 2003, from Trident Trust to Barclays Bank Guernsey authorises the bank to transfer balances on the accounts of AIS to an account with the same bank in the name of Select Design Trading Ltd. Third, on June 4, 2003 Trident Trust authorised Barclays Bank to transfer the balance of the amount in the account of Select Design Trading Ltd to the Trident Trust client account.

On May 24, 2005 the Claimants’ solicitors asked for details of 5 payments totalling £32,938 described as “Select Funds CP Liverpool Cont Cent trf” made to a Barclays Bank, Cwmbran, account in the name of Mr and Mrs Raven. I was shown a statement of the account showing such a receipt of £8,000 on March 10, 2003. Mr Raven told the trustee in bankruptcy that he did not know what the receipt from Select Funds etc was for.

The evidence was that the company originally run by Trident Trust for Mr Raven, Offshore FS, changed its name to Select Design Trading Ltd. When Select Design Trading Ltd was called Offshore FS, its account at Barclays Bank Guernsey 70756512 shows the receipt of two sums of £6,000 each in May and June 2002 from IC Consultants SA.

In evidence, Mr Raven said that Select Design Technologies Ltd was an Australian company which was trying to perfect a revolutionary gear box. It had approximately 300 other investors. Mr Raven purchased shares in the company as a result of meeting the company’s managing director, Stephen Hargreaves. He bought the shares as an investment as he thought that, once the technology was proven, the company would be registered on the Australian stock market and the value of the shares would increase. Mr Raven bought just less than 4 million shares for approximately $140,000 (Australian).

Select Design Trading Ltd was run by Trident Trust and was set up to work with Select Design Technologies Ltd to market the shares and to bring in investors for the pre-development stage of the product being developed by Select Design Technology Ltd. Select Design Trading Ltd did not have the long-term success he had hoped for. The shares purchased in Select Design Technologies Ltd are held in his wife’s name, and the company has many other investors. Neither he nor his wife are significant shareholders, and there are documents to prove this.

Mr Raven’s account is riddled with inconsistencies. First, he originally swore that Mrs Raven had simply invested in Select Design Technologies Ltd. But the memorandum prepared by Mr Le Tissier of Trident Trust on January 21, 2003 indicates that Mr Raven was given shares in Select Design Technologies Ltd “in recognition of his involvement in the company”. Second, in Mr Raven’s first affidavit he said that Mrs Raven purchased the shares in Select Design Technologies Ltd. But in his third affidavit, he says that Offshore FS (Select Design Trading Ltd) originally held the shares in Select Design Technologies Ltd, which were then transferred to Mrs Raven. Third, Mr Raven in his third affidavit had previously only stated that Offshore FS Ltd had passively owned shares in Select Design Technologies Ltd, but in evidence Mr Raven accepted that Select Design Trading Ltd (Offshore FS by its new name) actively marketed such shares as a business.

In fact Mr Raven was running Select Design Trading Ltd (having changed its name from Offshore FS at some point between June 2002 and March 2003) on his own from Guernsey, and received into five Barclays Bank accounts about £33,000 described as “Select Funds CP Liverpool Cont Cent trf”, and, as in the case a previous funds company in Australia in which Mr Raven was involved (IC Mutual Australasia), ASIC (the Australian securities regulator) placed a stop order on Select Design’s “offer information statement”.

I am satisfied that these facts show that Mr Raven was earning an income after the collapse of the Imperial Consolidated Group in respect of another fund based on Select Design Technologies Ltd, and receiving payments in respect of the same.

Mr Raven received £63,106 into his HSBC account from Brewin Dolphin Securities on December 19, 2002. On May 24, 2005 the Claimants’ solicitors asked what this payment was for, and asked for authority to contact Brewin Dolphin.

In answer to a question from the trustee in bankruptcy concerning £40,000 which was transferred to Coutts & Co from Mr and Mrs Raven’s account at Nordea Bank, Switzerland on July 29, 2002, Mr Raven said that he had never had a Coutts & Co account, and that he believed it might be a Brewin Dolphin account (or that of another broker) as this was the amount invested in London Clubs.

None of these matters were mentioned or reflected in his affidavits following Rimer J’s order. In oral evidence Mr Raven stated that the money from Brewin Dolphin represented profit (and capital) from two investments, London Clubs (which made a profit), and Cantor Index (which apparently made a loss), so that Mr Raven’s net profit on London Clubs was apparently over £23,000.

Mr Raven has provided no documentation supporting his version of events, and what he says cannot be relied on. I accept the Claimants’ submission that either (1) the £63,109 income from Brewin Dolphin remains unexplained, leaving the inference that Mr Raven has been earning income from unspecified investments after the collapse of the Imperial Consolidated Group contrary to his evidence, and therefore making such evidence in contempt of court; or (2) Mr Raven’s explanation is accepted, in which case Mr Raven admits to earning over £23,000 on an investment in London Clubs after the collapse of the Imperial Consolidated Group in July 2002, which is again (either alone or added to the other evidence of Mr Raven’s post-collapse money-making) contrary to his evidence of non-income earning after March 2002, making such evidence in contempt of court.

I have been informed that after court on October 14, 2005, Mr Raven supplied to the Claimants an authority to deal with Brewin Dolphin.

I am satisfied that the facts indicate a clear breach in respect of the Brewin Dolphin receipt.

The examples of Select Design Technologies Ltd and Brewin Dolphin show that this head is clearly made out to the requisite standard. Were it necessary (which it is not) I would have held that the lies and evasions in relation to the other heads would have supported this conclusion.

Breach of the order to set out in affidavit the circumstances of the receipt and current whereabouts of the Claimed Assets, attaching all relevant documentation, by refusal to co-operate in the examination of a Coutts bank account through which the Claimed Assets have passed

£40,000 was transferred to Coutts & Co from Mr and Mrs Raven’s account at Nordea Bank, Switzerland on July 29, 2002. Details of the Coutts & Co account were asked for in the list of May 24, 2005. There has been no response. Mr Raven told the trustee in bankruptcy that he has never had a Coutts account, and this may be the Brewin Dolphin account into which his investment was made.

The Claimants say that Mr Raven has not shown that the Coutts bank account is not in fact his or connected to him.

I am not satisfied that a contempt has been made out. In any event this head does not add anything to the complaint made about Brewin Dolphin.

Breach of the order to set out in an affidavit the circumstances of the receipt and current whereabouts of the Claimed Assets, attaching all relevant documentation: his account of the circumstances of the Sidera loan, and his failure to respond to questions about the same, including the provision of a relevant authority for Trident Trust to co-operate with the Claimants, leads to the conclusion that his evidence is false, and he has failed to set out the whereabouts of the Sidera monies, and has not supplied all relevant documentation

In his first affidavit Mr Raven said, under the heading “Investment in the Sidera Group of Companies” in the context of disclosure of his assets, that in or about May 2002 he entered into negotiations with Mr Marcus Queree and Mr Mark Wharbuton to invest in Sidera Group, which was seeking to launch and manage a hedge fund. It was anticipated that the management fees generated from the hedge fund would generate significant profits.

Mr Raven said in his affidavit that Mr Queree had considerable experience and expertise in the financial services sector, and that initially the prospects for the fund appeared bright. The company obtained the backing of Deutsche Bank who agreed to guarantee the capital element of the fund. Mr Raven was unable to acquire a shareholding in the company for regulatory reasons and, instead, agreed to lend money to the business to support its working capital commitments. A loan agreement was drawn up although never formally executed. His records showed that he lent some £322,807.94 to the business, although he believes that the Sidera management accept that he loaned only £220,000.

A schedule of loans said to be owed to the Defendants was exhibited to his first affidavit, and indicated that the Sidera group owed him £322,807.94 but that “present value negligible/unknown.”

In his third affidavit he said that the Sidera investment was funded by loans through bank accounts to which the Claimants had had access. He attached a breakdown of payments, which showed payments made to the Sidera group of £309,307.94 between April 2002 and March 2003. He exhibited a copy of the loan agreement, and said that it was never formally executed but it was acted upon. Security was not given because no security was available. The monies were to be used to fund working capital requirements to permit the company to get off the ground. He invested funds by way of a loan because for regulatory reasons he could not become a shareholder. He wished to pursue his options for recovery against Sidera but he was restrained by the existing order of the court from dealing with his assets.

In evidence, Mr Raven said that he was introduced to the managing director of Sidera, Marcus Queree, who approached Mr Raven with a business proposition to begin a FSA regulated fund company offering offshore funds with a Deutsche Bank capital guarantee. Marcus Queree and Rory Gage (who is a FSA regulated fund manager) are both shareholders of the company today. James Quarmby was the solicitor who helped draw up the structure. No loan documents were actually executed. Eventually, Mr Raven had to instruct lawyers to try and recover the loan to Sidera. This resulted in Sidera agreeing to an outstanding loan to be paid back at £10,000 per quarter. The file relating to the recovery of the loan will be in the possession of the official receiver or the trustee in bankruptcy, and the documents contained in the file can show the audit trail of all monies. The money for the loan came from his HSBC and Barclays accounts and that the information for these bank accounts had already been disclosed to the Claimants. Mr Raven concluded that the matter was taken out of his hands when the freezing orders were imposed.

The unanswered evidence from the Claimants is that Sidera was set up by Trident Trust. Company searches carried out by the Claimants show that a web of Sidera companies exist in the United Kingdom, Gibraltar and the BVI. The UK companies are owned by the Gibraltar company, which is 51% owned by Trident Trust, which is almost certainly acting as a trustee for Mr Raven. Mr Raven failed to provide the Claimants with the authority to obtain necessary documentation from Trident Trust in relation to the Sidera loan. I understand that he gave such authority following the hearing on October 14, 2005.

Other documents exhibited by the Claimants include these:

Mr Raven’s third affidavit exhibited a set of draft accounts for Sidera, i.e. Sales & Marketing Ltd (Company No. 4437800), which showed bank loans of £218,276, but no loans from Mr Raven, although in his affidavit he said that the company accepted that they received that same amount from him. There must be some question about the genuineness of this document since the Claimants have produced a company search for a company with the same name but a different number (04412945), which was dissolved in January 2004.

I am satisfied that Mr Raven’s account of the Sidera transactions is untruthful. He presented himself as someone who had originally intended to be a mere investor, but, when that became impossible, lent money pursuant to a loan agreement, which was not in fact executed. The documents show clearly that he was behind Sidera. Thus, as I have said, the memorandum by Mr Le Tissier dated July 10, 2002 states that Mr Le Tissier told Mr Raven that the Guernsey authorities had reviewed the application of Sidera International Marketing in Guernsey, had asked further questions, and might not approve it, in which event Mr Raven might have to consider an alternative jurisdiction. The memoranda and letters from Mr Larsen to Mr and Mrs Raven are about such matters as the licence for the premises, projected cash flow, and tax and salaries. Mr Le Tissier’s memorandum indicates that Mr Raven would be promoting the Sidera/Deutsche protected fund.

The alleged loan agreement is a sham. The payments on Mr Raven’s schedule bear no relation to the payments to be made under the loan agreement. Mr Raven was, it seems, considering a draft loan agreement on July 10, 2002 when he had already advanced about £58,000 by the end of June. As I have said, the letter of July 25, 2002 from Mr Larsen instructs AIS Marbella to make salary payments in amounts which are the same as those shown on Mr Raven’s schedule of loans to Sidera International; and a memorandum of August 20, 2002 informs Mr Raven of the banking instructions for payment to the company of £38,000, which appears on Mr Raven’s schedule of loans to Sidera International under August 2002.

I am satisfied to the requisite standard that Mr Raven has failed to provide the explanation or relevant documentation required for the Claimants to trace the Sidera monies (which are Claimed Assets), and the fact that Mr Raven has failed to answer the above questions leads to the conclusion that his evidence in respect of Sidera has been wholly false, in breach of Rimer J’s order.

Breach of the order to set out in an affidavit the circumstances of the receipt and current whereabouts of the Claimed Assets, attaching all relevant documentation, and breach of the order to swear an affidavit disclosing the value, location and details of his worldwide assets, by refusal to provide credit card statements detailing the expenditure of £550,000 of the Claimed Assets, or by substantiating the disposal of at least £30,000 of Claimed Assets between January 4 and 25, 2005

At the hearing this allegation was narrowed to failing to account and provide documentation in respect of the disbursal of Claimed Assets being £45,000 of cash taken out of bank accounts between January 5, 2005 and January 20, 2005, and making false statements concerning the funding of his lifestyle since January 2005, and failing to disclose assets in relation to the same.

A schedule prepared by the Claimants of payments from Mr and Mrs Raven’s bank accounts and credit cards shows that he took out about £45,000 in cash between January 5 and January 20, 2005.

In effect, Mr Raven has admitted a breach of Rimer J’s order in this respect.

In relation to Mr Raven’s credit card statements, the Claimant’s evidence is that at least £550,000 of the Claimed Assets has been spent through Mr Raven’s Barclays’ credit card since September 2000, and yet he has refused to provide any statements for this period for this credit card, or any of his other cards. The Claimants say that his refusal to respond in these circumstances can only lead to the conclusion that Mr Raven’s affidavits of disclosure about his assets are false, also in contempt of court.

As regards questions raised by the Claimants concerning the funding of the lifestyle of Mr and Mrs Raven, the Claimants’ case is that: (a) Mr Raven said in his first affidavit that his annual expenditure over the past number of years had been running at between £300,000 and £500,000; (b) in his third affidavit he said that they had been living off Mrs Raven’s credit card, but the statements do not bear this out; (c) then Mr Raven said to the trustee in bankruptcy that he had been receiving loans from his mother (but she is described in his third affidavit as a police widow struggling, at least in 2000, with her finances); (d) before Rimer J’s order was made Mr Raven said that he was spending £10,500 per month (which was the figure inserted in the order for permitted expenditure); (e) at the hearing he said he was living on handouts from his family and friends, and that he was about to get social security payments.

In evidence, Mr Raven said that towards the end of 2004 he was working on a property investment project in Southern Spain. He had had the draft contract and signed it at the beginning of 2005. If this project had been completed it would have provided him with €100,000. The project was not completed as the investors in the project pulled out because of Mr Raven’s arrest in December and the information subsequently published on the internet. He has been living off of assets that he has liquidated and that he had intended to sell his property but due to the freezing order this was not possible. Mr Raven added that he had no money and that all of his cars, except for one, had been repossessed. Mr Raven was concerned as he was in arrears with his mortgage and feared that his property would be repossessed. Mr Raven further stated that he had been living on handouts from his family and friends and has had to resort to reliance on social security payments although he has not received a social security payment to date. Mr Raven believes he could produce a breakdown of money that left his accounts since January. He stated that some money was used to pay credit card bills but that his wife had dealt with this. His wife is highly stressed and has recently attempted suicide. Mr Raven concluded that if given time, he could produce a break down all monies spent since January showing where all funds came from and justify where they went.

I accept the force of the Claimants’ submission that the court should not accept Mr Raven’s uncorroborated assertions, and that, without more, the inference must be that Mr Raven is living off further undeclared assets. But I do not consider that this allegation is made clearly enough in the application notice to justify a finding of contempt of court.

The court has a wide discretion as to the penalties to be imposed. The court has power under section 14 of the Contempt of Court Act 1981 to impose a period of up to 2 years in prison. Execution of the committal order may be suspended for such period or on such terms as the court may specify: RSC Ord 52, r 7 (in CPR, Sched 1).

I have found that Mr Raven has refused to comply with Rimer J’s order in important respects and that his disclosure has, in material respects, been false. This is a case of a “serious, contumacious, flouting of orders of the court” which the Court of Appeal in Gulf Azov Shipping v Idisi [2001] EWCA Civ 21 found merited a custodial sentence.

I take a very serious view of Mr Raven’s contempts. I propose to adjourn the hearing until January 2006, when I will decide on the appropriate penalty. I will give directions as to the filing of evidence to deal with matters which have arisen since the hearing. If by the time of the adjourned hearing Mr Raven has made disclosures leading to Claimed Assets being traced, that would be a matter which may be taken into account in mitigation.