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England: Banker jailed for lying to the Court

BIScom Subsection: 
Editorial Staff

RIZWAN HUSSAIN has been jailed in the Central London Country Court (a court of first instance) by HH Lethem, J. Hussain has squirmed, wriggled and lied so as to remain in a flat he rented in South West London.

Hussain agreed to pay GBP1,950 to rent the flat at 203 Riverside Quay in London SW8, a enclave of expensive properties in a part of London that has not, historically, been terribly well thought of. However, "regeneration" of the industrial areas including the former Battersea Power Station (without Pink Floyd's flying pigs) and its proximity (across the river) to Chelsea, the West End and the City have increased its popularity immensely. Properties in Riverside Quay itself are, as of today, on the market for between GBP600,000 and GBP3.5 million.

Hussain was living beyond his means. Described in the Judgment as "banker /investment manager," he stopped paying rent in January 2019. The owners, non-domiciled absenteee landlords, had bought the property for investment.

Over a period, the landlords tried a range of options and eventually obtained a judgment and an eviction order. Hussain made repeated applications to set aside the Orders and, in doing so,

- made statements that were inconsistent
- made statements that were untrue
- gave to the Court two undertakings which he could not and did not satisfy.

One of those undertakings was that he had access to almost 100,000 being the arrears of rent. What he did not initially tell the court was

a) he was a bankrupt
b) his conduct in the bankruptcy was such that his automatic discharge was postponed
c) as a result he did not have control of any capital sum
d) the money he claimed he would use was held in an offshore discretionary trust.

The Court in this case did not take issue with the question as to how, if the trust was discretionary, Hussain thought he could compel the trustees to do as he told them. Seemingly, they were prepared to do so. But his next excuse was that the trustees had refused to pay because there were taxation implications of making the payment to non-domiciled persons using an offshore bank account. The learned Judge did not notice that this was unlikely to be an issue because the trust was itself offshore, managed by Kilimanjaro Capital Management Ltd., in the Isle of Man. Indeed, the Judge did not hear, directly, from anyone at Kikimanjaro although he did see what purported to be, and he apparently accepted as, a letter from that company. A short while later, the landlords provided details of a bank account within the UK but still the moneys were not paid.

By that time, Hussain had remained in the flat until early 2020. The landlords made an application for that Hussain be committed to prison for contempt.

Then the world more or less ground to a halt as the CoVid-19 pandemic caused chaos.

The landlords tried to get possession, Hussain frustrated them. Eventually, in June 2020, an order was made. Then the case came back before the Court on 30 July at which time Hussain was sent to jail for 12 months - 8 months for punishment for telling lies and four months "coercive element" which is supposed to make him think about what he's done.

The judge clearly did not expect any remorse and made a point of saying that Hussain was not at all contrite and when he did apparently apologise it was couched in such terms as to negate any sense that he might actually mean it.

But here's where the case doesn't make much sense. The Judge said that Hussain might choose to purge his contempt and " I am quite satisfied thatit is in his gift to pay the monies that are due to the claimants." It would be fascinating to know how His Honour comes to that conclusion: the money, if it is there, is in a discretionary trust which means that, if it's to be considered a genuine trust (and in the Isle of Man, trust companies have been bitten hard by US authorities looking to establish that the arrangement is not a bona fide trust so they tend to be cautious about letting beneficiaries tell them what to do) then he has no control over whether the money is, or is not, paid. Moreover, if he does have that control, then his trustee in bankruptcy will have first call on it.

His advocate raised a range of points in mitigation and the Judge politely swatted them away. He even leaned in Hussain's direction accepting a claimed extract from medical records showing that he is in a high-risk group under CoVid-19 and therefore could not be expected to move out. He did not express concern that a promised medical report was not produced. In relation to the loss, the Judge said "It is said by Mr Rees Phillips that that amounts to some GBP200,000. I content myself with simply saying that the amount that they are out of pocket is GBP100,000 plus, and of course that has been continuing week on week while the respondent remained in the property. I know nothing of the circumstances of the claimants and so can go no further in terms of evaluating the harm that has been caused to them. I have to say that the indications are that this is an investment property and that they are a wealthy family, and that therefore the harm caused is perhaps not the most significant factor in sentence." That flies in the face of constant media criticism that justice in the English courts favours the wealthy.

Perhaps the most bizarre statement in the judgment (there are many) is this "I accept,also, Mr Hussain is a man of good character, and that the shock of incarceration would be one to have a salutary effect upon him. I take into account also,the effect upon his reputation, the fact that he has been found guilty of a breach of his undertakings and in contempt of court. I take into account also,that reputation and integrity are important in the world of banking, and that this potentially has significant ramifications for his ability to earn an income."

One assumes that the "off good character" means that no evidence of prior criminal convictions was led. Otherwise, if this is a "man of good character," the world is in a far worse mess than might have previously been thought.

It might not be the jailing for contempt that makes it difficult for Hussain to get another job in banking. It might be that his character has been revealed and that any "fit and proper" test that might be applied to him will be awkward to say the least. At least he didn't get banged up for perjury, so that's a win.

VASWANI and others v HUSSAIN

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