STUNNING allegations of a “criminal conspiracy” by a shipping giant to evade tax were made in court amid a wealthy couple’s “bitter” divorce.

Paul and Caroline Crowther filed for divorce in September last year but legal hearings have continued for months on end as they wrangle over ships thought to be worth about £8.15 million.

The affluent Hartfield couple owned Hove shipping firm Atlantic Marine and Aviation, which is now in liquidation, as well as “horses and expensive cars”.

But at a Court of Appeal hearing in June Mrs Crowther, 49, claimed her 54-year-old husband had “conspired” with accountant Steven Knight to “evade tax”.

She claimed Mr Crowther had concealed the couple’s ownership of the ships from tax collectors. The vessels are legally owned by Mr Knight’s Gibraltar firm Castle Ship Management.

But Mrs Crowther argued this was a “sham” to evade tax and both of the Crowthers are entitled to shares of the ships in the divorce settlement as they are the true owners. Mr Knight and Mr Crowther both deny this, insisting Castle is the sole owner of the ships.

The Argus: Mr Crowther, pictured in 1999Mr Crowther, pictured in 1999

Mrs Crowther also claimed the couple’s company purchased a ship from Castle at an inflated price without intending to pay it – in order to evade tax.

The court also heard a Gibraltar charity managed by Mr Knight paid private school fees for one of the couple’s children.

In a judgement published on June 16, Lord Justice Sir Stephen Males said the claims warranted “careful investigation… perhaps by tax authorities” but had not reached a final conclusion.

He said he was “satisfied” Mrs Crowther had an arguable case that deals made between companies owned by the couple and Mr Knight were a “sham”.

The judge stated the Crowthers had enjoyed an “affluent lifestyle”.

“They lived in a house in Sussex valued in excess of £4.5 million, educated their three children privately, owned horses, a collection of expensive cars, and until recently an interest in a private aeroplane,” he wrote.

Mrs Crowther’s allegations centred around agreements made between the Crowther-owned Atlantic Marine and Aviation and Mr Knight’s Gibraltar firm Castle Ship Management in November 2012.

The Argus: Mr and Mrs Crowther in 2003Mr and Mrs Crowther in 2003

Castle agreed to take on Atlantic’s debts in exchange for the legal ownership of the five vessels it owned at the time. It then rented the ships back out to Atlantic so it could continue letting the ships to other companies.

But the court heard Atlantic has not paid Castle any rent for the vessels since 2015, with no evidence of Castle demanding these payments until September last year – after the couple filed for divorce.

And Mr Justice Males said it was possible the “true nature” of the arrangements was a “criminal conspiracy” between the accountant and the Crowthers to evade tax on the couple’s earnings by hiding the fact the couple owned the ships. Mrs Crowther denied any involvement in this.

Mr Knight and Mr Crowther also deny any wrongdoing. They claimed Castle is both the legal and beneficial owner of the vessels and the agreements they reached in 2012 were genuinely put in place to save the company from debt.

They also told the court Mrs Crowther was present at a meeting between themselves in November 2012. Mrs Crowther did not deny this, the court heard.

The judge said it was “odd” Mr Knight and Mr Crowther were still working together despite Mr Knight claiming in a November hearing the Crowthers and their companies owed him £7 million. He has since revised this figure to £5 million, the court heard.

The Argus: The Atlantic Endeavour, one of the vessels owned by Castle Ship Management. Photo: Atlantic Marine and AviationThe Atlantic Endeavour, one of the vessels owned by Castle Ship Management. Photo: Atlantic Marine and Aviation

A judge at a previous hearing claimed the men were “still on friendly terms” despite the large debt Mr Crowther supposedly owed, something Mr Justice Males also branded “odd”.

Despite Castle taking its boats back from Atlantic in November, Mr Crowther still appeared to be technical manager of Castle’s vessels as of the June hearing, the judges heard.

Mr Justice Males also questioned whether Mr Knight and Mr Crowther had created an “artificial paper trail” to cover up their tracks.

Emails exchanged between the duo in November 2012 appear to show letters from Castle to Atlantic demanding loan repayments were actually “carefully orchestrated by Mr Knight and Mr Crowther”, the court heard.

And despite Mr Crowther claiming in an October hearing the past three years had led to a “severe downturn in business” for Atlantic, an email sent by him in February last year allegedly read: “The business has NO debt.

“Last year we produced a net profit. This year will be better still.”

The Argus: The Atlantic Tonjer, another of the ships owned by Castle Ship Management. Photo: Atlantic Marine and AviationThe Atlantic Tonjer, another of the ships owned by Castle Ship Management. Photo: Atlantic Marine and Aviation

Meanwhile Mr Justice Males suggested “close scrutiny” into Atlantic’s apparent purchase of the Atlantic Discovery ship from Castle for £2.95 million in August 2018.

The court heard Castle had bought the vessel, then known as CD One, for £320,000 just two months before.

Judges heard Mrs Crowther claimed the ship was “grossly overvalued” by Mr Crowther and Mr Knight so the Crowthers could evade tax on money made from selling Maritime House in Hove, owned by another Crowther company called Maritime Atlantic.

Tax on profit made from selling commercial property can be avoided if a portion of the profit is immediately reinvested into something else, a tax break known as “rollover relief”.

Emails from Mr Crowther’s accountant at the time advised the businessman he would need to reinvest nearly £3.2 million to avoid the tax, Mr Justice Males wrote.

The Argus: Lord Justice Sir Stephen Males presided over the proceedingsLord Justice Sir Stephen Males presided over the proceedings

Though a receipt for the purchase was signed by an employee of Mr Knight’s, he now claims the Crowthers never paid him the £2.95 million for the Atlantic Discovery, the court heard.

“These facts do at least give rise to a suspicion that £2.95 million was a fictional purchase price,” the judge wrote.

Finally Mr Justice Males said it was odd the Mediterranean Sports, Art, and Educational Foundation, a Gibraltar charity owned by Mr Knight, allegedly granted money to the Crowthers.

In 2012 a fund was established for Mrs Crowther and her children in case Mr Crowther died, the court heard.

Mr Knight told the court no money was ever paid into this fund and he had instead financed the Crowthers’ lifestyle with a £1.6 million loan.

But Mr Justice Males referenced a 2013 email from Atlantic employee James Stenning to Mrs Crowther which allegedly read: “Would you like me to get another £100k over to Castle. Let’s build up that house fund!!!”

“The word ‘another’ suggests this was a procedure which had been employed in the past,” the judge wrote.

The Argus: The Atlantic Enterprise, another of the ships legally owned by Castle. Photo: Atlantic Marine and AviationThe Atlantic Enterprise, another of the ships legally owned by Castle. Photo: Atlantic Marine and Aviation

In May 2014 Mrs Crowther emailed Mr Knight making a formal request to the Mediterranean Sports, Art, and Educational Foundation to consider a grant for the purchase of a horse box for one of her children, the court heard.

Then in January 2018 the foundation paid school fees for another of the Crowthers’ children, judges were told.

“That would make sense if the money was in reality the Crowthers’ own money,” Mr Justice Males wrote.

“But it is puzzling Mr Knight’s entity was prepared to make such ‘charitable’ donations at a time when, as will be seen, Mr Knight now says that he was owed a substantial amount.”

Mrs Crowther made the bombshell allegations at a June 9 hearing demanding a court order to prevent Mr Knight and four of his firms from disposing of four vessels legally owned by Castle Ship Management, or disposing of proceeds from another ship sold for scrap.

A previous court order preventing Mr Knight from disposing of these vessels was lifted by a judge in March.

But Mrs Crowther appealed against this in June, claiming her husband and Mr Knight were “conspiring” to claim the couple had no financial interest in the vessels so Mrs Crowther would not be awarded a share of the ships’ value in any divorce settlement.

Mr Knight and Mr Crowther deny this. They claim there is an urgent need to sell one vessel to fund upkeep for the others. They said Castle is the only legal and beneficial owner of the vessels.

In the judgement, Lord Justice Males reinstated the order until further notice, claiming there was “sufficient risk” the accountant could intentionally waste the assets to prevent Mrs Crowther getting a share. But the order allows Mr Knight and his firms to sell one of the vessels to fund running costs for the others.

The order affects the following vessels:

  • Atlantic Enterprise, a ship thought to be worth about £2.5 million
  • Atlantic Tonjer, a ship said to be worth about £1.8 million
  • Atlantic Discovery, thought to be worth about £2.95 million
  • Atlantic Endeavour, a yacht thought to be worth about £600,000
  • About £300,000 of proceeds made from the sale of the Atlantic Explorer for scrap