The Financial Conduct Authority (a company limited by guarantee) v WealthTek LLP (in special administration) & Anor

The Financial Conduct Authority (a company limited by guarantee) v WealthTek LLP (in special administration) & Anor

A 12-month stay of the High Court civil proceedings is required by the interests of justice because the existence of a criminal restraint order over Mr Dance's assets and the substantial overlap between the civil and anticipated criminal proceedings mean that continuing the civil case would risk unnecessary depletion of realisable assets, duplicate proceedings, and waste of resources. Section 58(5) of the Proceeds of Crime Act 2002 applies, supporting a stay to preserve assets for potential confiscation. The FCA, as regulator and prosecutor, is entitled to prioritise its criminal investigation. No real risk of serious prejudice to Mr Dance arises from a 12-month stay, and he will have the...

Parties
Claimant: The Financial Conduct Authority; First Defendant: WealthTek LLP (in Special Administration); Second Defendant: Jonathan Edward Dance
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Civil / Application for Stay of Proceedings
Outcome
12-month stay of High Court civil proceedings granted
Legal Topics
Stay of Proceedings, Criminal Restraint Orders, Regulatory Enforcement, Asset Freezing, Overlap of Civil and Criminal Proceedings
Financial Regulation Civil Procedure Criminal Law Stay of Proceedings Criminal Restraint Orders Regulatory Enforcement Asset Freezing Overlap of Civil and Criminal Proceedings

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Parties

The Financial Conduct Authority

Claimant

WealthTek LLP (in Special Administration)

First Defendant

Jonathan Edward Dance

Second Defendant

Procedural Posture

Civil / Application for Stay of Proceedings

Legal Issues

  1. 1 Whether a 12-month stay of High Court civil proceedings should be granted pending the outcome of a criminal investigation and potential prosecution by the FCA against the second defendant
  2. 2 Whether section 58(5) of the Proceeds of Crime Act 2002 applies to these proceedings and mandates a stay or is a relevant factor
  3. 3 Whether the interests of justice require a stay, considering the overlap between civil and criminal proceedings, the preservation of realisable assets, and potential prejudice to the defendant

Ratio Decidendi

A 12-month stay of the High Court civil proceedings is required by the interests of justice because the existence of a criminal restraint order over Mr Dance's assets and the substantial overlap between the civil and anticipated criminal proceedings mean that continuing the civil case would risk unnecessary depletion of realisable assets, duplicate proceedings, and waste of resources. Section 58(5) of the Proceeds of Crime Act 2002 applies, supporting a stay to preserve assets for potential confiscation. The FCA, as regulator and prosecutor, is entitled to prioritise its criminal investigation. No real risk of serious prejudice to Mr Dance arises from a 12-month stay, and he will have the...

Court Disposition

12-month stay of High Court civil proceedings granted

Orders

  • High Court civil proceedings stayed for 12 months
  • Court to hear parties on consequential orders, including variation or discharge of the interim prohibitory injunction against Mr Dance