Judge says divorce battle could land couple in tax dodging probe

Judge says estranged wife’s ‘bitter’ £12m divorce battle with her multimillionaire shipping tycoon ex could land both of them at centre of tax dodging probe

  • Captain Paul Anthony Crowther and wife Caroline announced divorce in 2018
  • They lived in a £4.5mil house in East Sussex while running a shipping business 
  • After it ended a court battle started with ‘a high degree of acrimony’ over assets 
  • Mrs Crowther is arguing that an £8.15m fleet of boats owned by offshore companies were in reality assets of the marriage 
  • Cpt Crowther insists that the ships are not beneficially owned by him, his ex or their company and should be ignored in their divorce fight over money 

An ex-wife’s £12million divorce battle with her multimillionaire shipping tycoon former husband could land them both at the centre of a tax dodging probe, a top judge has said.

During their 22 years together, Captain Paul Anthony Crowther, 54, and his wife Caroline lived a life of luxury in a sprawling £4.5m manor house in the East Sussex countryside, while operating a lucrative business chartering ships to offshore oil, gas and wind farm industries.

Mrs Crowther, 49, a keen rider, splashed out on a string of ‘valuable horses,’ while the couple also enjoyed a fleet of luxury cars and a stake in a private plane, and sent their kids to private schools.

But after the wealthy couple’s relationship collapsed in 2018, they began a court fight with ‘a high degree of acrimony on both sides’ over the assets of their failed marriage.

In the Court of Appeal this week, Lord Justice Males warned that should Mrs Crowther prove her case, the former couple could both be implicated in a ‘criminal conspiracy…to evade tax properly due’ on their earnings. 


Captain Paul Anthony Crowther, 54, (right) is locked in a bitter divorce battle with ex-wife Caroline Crowther, 49, (left) over a £10m fleet of ships owned by an offshore business that she is claiming should be included in their divorce settlement

Mrs Crowther is arguing that an £8.15m fleet of boats owned by offshore companies were in reality assets of the marriage and ought to be put in the pot when their wealth is split.

But Cpt Crowther insists that the ships are not beneficially owned by him, his ex or their company and should be ignored in their divorce fight over money.

The wife obtained freezing orders banning the ships from being sold last year, but they were overturned by a High Court judge earlier this year following a challenge by the husband.

But Lord Justice Males, in the Court of Appeal, has now reimposed the freezing injunctions to preserve the value of the ships until the money fight between the spouses has been decided.

As well as the disputed ships, the former couple’s assets include the multi-million pound manor house which was their former matrimonial home, near Hartfield, in East Sussex

The court heard that, as well as the disputed ships, the former couple’s assets include the £4.5m pound manor house which was their former matrimonial home, near Hartfield, in East Sussex.

The pair’s manor house at Landhurst was formerly the country home of film mogul J Arthur Rank, and is situated next to the farm where Winnie the Pooh was written, close to the site of the real Poohsticks Bridge in Ashdown Forest and the places that inspired the Hundred Acre Wood.

The row over who owns the ships has roots in a 2012 agreement the couple entered into with Gibraltar-based accountant, Steven Knight, that five ships from their fleet – the Atlantic Guardian, Atlantic Surveyor, Atlantic Cougar, Atlantic Wind and Atlantic Carrier – would be transferred from the ownership of their company to that of one of Mr Knight’s offshore businesses.

Over the subsequent years, the couple made money by chartering, then sub-chartering, those ships or their successors.

Mr Crowther insists that the transfer of the ships to Mr Knight was a genuine and straightforward transaction and that neither the Crowthers, nor their business, have any beneficial interest in them now.

Cpt Crowther insists that the ships are not beneficially owned by him, his ex or their company and should be ignored in their divorce fight over money

He denies any wrongdoing or tax evasion.

But Mrs Crowther says the transaction was a ‘sham’ carried out to dodge tax, and claims the ships, which were worth abut £8.15m in 2012, should be regarded as marital assets.

Last year, she obtained a series of freezing injunctions, banning Cpt Crowther, Mr Knight and his companies from selling or otherwise disposing of the ships.

But Mr Justice Holman overturned the freezing orders in the High Court in March this year.

He concluded that the transfer of the boats had been a genuine ‘commercial arrangement’ rather than an attempt ‘to defeat the claims of the wife to financial remedy orders.’

Overturning that ruling and the freezing injunctions, Lord Justice Males said: ‘Paul and Caroline Crowther used to run a shipping business together, but are now in the throes of a bitter divorce.

Mrs Crowther is arguing that a £10m fleet of boats owned by offshore companies were in reality assets of the marriage and ought to be put in the pot when their wealth is split. Pictured: The Atlantic Discovery, one of the boats being fought over

‘Mr Crowther’s expertise was in shipping, so he was responsible for chartering out the vessels and for their management and operation. Mrs Crowther dealt primarily with the financial side of the business and also with property management.

‘It appears that the business was sufficiently successful to enable the Crowthers to enjoy an affluent lifestyle. They lived in a house in Sussex valued in excess of £4.5 million… educated their three children privately, owned horses, for which purpose they employed a groom, a collection of expensive cars, and until recently an interest in a private aeroplane.

‘The depressing procedural history of the divorce proceedings so far… demonstrates a high degree of acrimony and mistrust on both sides.

‘Only two possibilities have been suggested as the true nature of the 2012 arrangements. The first is that the arrangement reached was, as Mr Knight and Mr Crowther say, a commercial agreement to transfer both legal and beneficial title to the vessel owning companies to (Mr Knight’s business).

‘The second possibility is that it was a criminal conspiracy between Mr Knight and Mr Crowther, but also involving Mrs Crowther who attended at least one of the relevant meetings, to evade tax properly due on the Crowthers’ earnings.

‘The first of these possibilities has the support of some contemporary documents

‘I bear fully in mind that the second possibility is a very serious allegation…Cogent evidence would be required to make good such a serious allegation at trial.

‘(But) I am satisfied that Mrs Crowther has a good arguable case that the 2012 arrangements were indeed a sham.

‘I repeat that I reach no final conclusion about any of these matters. All of them will require careful investigation, either in the course of the Family Court or Admiralty proceedings or perhaps by the tax authorities. There may be an explanation which is consistent with the case made by Mr Knight and Mr Crowther.

‘But as matters stand at present, I am inclined to think that the court has not been provided with a full account of the parties’ relationship and have no doubt that Mrs Crowther meets the standard of demonstrating a good arguable case on the merits of her claim.

‘In these circumstances, the risk that assets will be put beyond reach of any judgment speaks for itself…on the present state of the evidence, there is a sufficient risk that assets may be dissipated to justify the grant of a freezing order.’

The judge, sitting with Lord Justice Phillips and Lord Justice Moylan, varied the freezing orders imposed last year to allow one of the ships to be sold so that the proceeds can be used for the maintenance and repair of the others while the divorce battle rumbles on.

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