Crown Prosecution Service v Ronald William Comption, Comptons of Brighton Limited, David Coyne (As Trustee in Bankruptcy of the Bankrupt Estate of Ronald Compton & Margeret Compton, Margeret Olive Compton) [2002] E.W.C.A. Civ 1720 (C.A.)

Facts: On 2 January 2001 Ronald William Compton, the first respondent (‘Mr Compton’), pleaded guilty in the Hove Crown Court to offences of possession of heroin and cannabis resin with intent to supply for which on 17 January 2001 he was sentenced to seven years’ imprisonment. He had been arrested on 4 November 1999 together with his wife, the fourth respondent (‘Mrs Compton’), albeit she in the event was not prosecuted. On 19 September 2000 Mrs Compton was adjudicated bankrupt; so too, on 24 October 2000 was Mr Compton. The trustee in bankruptcy for each was the third respondent, David Coyne (‘the trustee in bankruptcy’). He and the company alone among the respondents have appeared to resist the CPS’s appeal. The company, set up by Mr Compton, was incorporated on 6 October 1993. Mr Compton was appointed sole director, Mrs Compton the company secretary. On 12 September 1996 the company’s annual accounts for 1994 and 1995 were filed; they showed the company to be insolvent. From October 1996, however, there was a dramatic improvement in the company’s fortunes with large cash deposits being made to the account of the company and property being purchased by the company. Stanley Burnton J, refused the CPS’s applications for restraint and receivership orders against the company. On this appeal the CPS contend that the judge was wrong to hold that no prima facie case arose on the evidence before him that the company was a sham and wrong too, if such was his view, to regard a prima facie case as an insufficient basis upon which to make interim restraint and receivership orders.