Raja v Van Hoogstraten & Anor

These are appeals from orders made by Mr Justice Peter Smith in proceedings brought by the late Mr Mohammed Sabir Raja against Mr Nicholas van Hoogstraten and others. The orders under appeal include (i) an order made on 11 October 2002 on a finding that Mr van Hoogstraten was in contempt of court in failing to comply with an earlier freezing order, made on 27 August 2002 by Mr Justice Rimer, and (ii) an order made on 12 December 2002 striking out Mr van Hoogstraten’s defence and counterclaim in the action, debarring him from defending the action on liability, directing that judgment be entered for the claimant and giving leave to the claimant to issue a writ of sequestration. The writ of sequestration was issued on 13 December 2002. The relief sought on the appeals includes an order setting aside that writ and bringing the sequestration to an end.

Each of those orders was made at time when Mr van Hoogstraten was confined in HM Prison, Belmarsh, following his conviction for the manslaughter of Mr Mohammed Raja. That conviction, on an indictment for murder and conspiracy to murder, was quashed in July 2003. Mr van Hoogstraten was re-indicted. In December 2003 the re-indictment was itself quashed at the Central Criminal Court. The Court of Appeal, Criminal Division held that it had no jurisdiction to entertain an appeal from that decision. Mr van Hoogstraten does not, now, face further criminal proceedings in connection with the death of Mr Mohammed Raja.

These proceedings were commenced by writ issued by Mr Mohammed Raja as long ago as 1993. The claims arose out of dealings between Mr Raja and Mr van Hoogstraten in the period from July 1988, or thereabouts, to June 1993. Put shortly, it was said on behalf of Mr Raja that Mr van Hoogstraten, or companies under his control, had made loans to enable Mr Raja to purchase properties for investment on terms that the loans would be secured by the deposit of land certificates. In order that the security should be more readily enforceable – in case, for example, Mr Raja were to die – blank land registry transfers were provided. Mr Raja’s complaint, as originally pleaded, was that, without authority, Mr van Hoogstraten had caused certain of the properties to be transferred into his name, or into the names of associates or of companies which he controlled. The claim against Mr van Hoogstraten, at that stage, was for breach of contract.

For some years little progress appears to have been made in those proceedings. On 2 April 1999, Mr Raja obtained permission to amend his particulars of claim so as to allege fraud and fraudulent conspiracy against Mr van Hoogstraten and three named companies. That amended plea provided a basis for allegations of constructive trusteeship, and upon which to seek accounts, restitutionary relief and tracing remedies.

Mr Raja was murdered on 2 July 1999. By an order made on 8 November 1999 his eldest son, Mr Asgar Sabir Raja, was appointed to represent the interests of his estate in these proceedings. Hereafter it will be convenient to refer to Mr Asgar Raja as the claimant.

In September 2001 Mr van Hoogstraten and two others were charged with murder and conspiracy to murder. The criminal trial on that indictment commenced in April 2002. It was part of the Crown’s case against Mr van Hoogstraten that he had conspired in, or arranged, the murder of Mr Mohammed Raja in order to stifle the civil proceedings; and, specifically, to avoid the allegations of fraud, introduced in April 1999, from being tried.

On 4 July 2002, following a case management conference some two weeks earlier, Mr Justice Peter Smith gave extensive case management directions with a view to bringing these proceedings to a trial in the early months of 2003. Those directions included permission to re-amend the particulars of claim and an order that Mr van Hoogstraten file and serve a re-amended defence and counterclaim by 30 August 2002.

On 19 and 22 July 2002 the jury brought in their verdicts in the criminal trial. Mr van Hoogstraten’s two co-accused were convicted of murder. Mr van Hoogstraten was acquitted of murder and conspiracy to murder, but was convicted of the manslaughter of Mr Mohammed Raja.

By application notice dated 8 August 2002 the claimant sought an order that Mr van Hoogstraten’s defence and counterclaim be struck out pursuant to CPR 3.4(2)(b) on the grounds that his conduct was such that to allow him to continue to defend the action would amount to an abuse of process; alternatively, under the inherent jurisdiction of the court on the grounds that he had been guilty of conduct which put the fairness of any trial in jeopardy or which was such as to render further proceedings unsatisfactory and prevent the court from doing justice. The basis of that application appears from a proposed further re-amendment to the particulars of claim, for which permission was sought by the same application notice:

In the meantime, the claimant applied for an order freezing Mr van Hoogstraten’s assets, whether within the jurisdiction or in a number of jurisdictions overseas. That application was supported by a lengthy affidavit sworn on 22 August 2002 by Mr James Lightfoot, a solicitor having conduct of the proceedings on behalf of the claimant. The affidavit described the charges against Mr van Hoogstraten in the criminal proceedings and the outcome of those proceedings. It referred to the application to strike out; asserting that to strike out the defence and counterclaim was the only appropriate response to Mr van Hoogstraten’s conduct “in ordering two men to commit an unlawful act against Mr Raja in an effort to discourage, dissuade or prevent him from pursuing the proceedings”. The need for a freezing order was said to rest on three main grounds (summarised in paragraph 57): (i) Mr van Hoogstraten’s “apparent intention to dissipate assets and place them beyond the reach of his potential creditors”, (ii) the way in which Mr van Hoogstraten “structures his affairs so as to make recovery of any final award extremely difficult and/or give rise to a clear risk that recovery will be frustrated”, and (iii) the difficulty of identifying assets against which recovery could be pursued and “concerns about the First Defendant’s ability to meet any judgment”. The flavour of the allegations made in the affidavit can be seen from the last three paragraphs:

The application for a freezing order was made without notice. It is, of course, not unusual to apply for such an order without giving notice to the party against whom it is sought. The justification for that course is that, if given notice of the application, the party will take steps to frustrate the order before it is made. But, as it seems to me, some thought might have been given as to whether that was an appropriate course in the present case and in the circumstances as they were in August 2002. Mr van Hoogstraten was reputed to be a very wealthy man, or (at least) a man in control of great wealth – see paragraph 52 of the affidavit where it is said that “Estimates of his wealth vary wildly from £500 million to £40 million”. He was said to own, or control, substantial properties in the United Kingdom (many of which were in the Brighton and Hove area). He was in prison and likely to remain there for months (until his appeal against conviction was heard) if not for years (if his appeal failed). He had been defending the civil proceedings for some nine years and had been facing charges of murder and conspiracy to murder since September 2001. He had been convicted of manslaughter more than a month before the application for a freezing order was made. For my part I doubt whether Mr van Hoogstraten would challenge the description of himself as a person with “a clear and unambiguous ability to transfer large sums of money and/or those assets that can be identified around the world and/or hide assets behind companies or in countries where they are unlikely to be found”. I suspect that he would regard the ability to transfer and hide assets as a necessary and valuable attribute in the world in which he does business. But, be that as it may, if he is indeed such a person as Mr Lightfoot described, I would find it remarkable if he had not already (long before the third week in August 2002) put those assets which he wished to protect beyond the reach of creditors. He had had ample opportunity to do so, if that were his intention. I find it difficult to think that Mr van Hoogstraten would have been prompted to take steps which he had not already taken in relation to assets under his control by the threat of a freezing order in proceedings to recover an amount of no more than £5 million. It seems that counsel for the claimant took much the same view when he told Mr Justice Rimer, at the hearing of the application, that it might be said that the order was not really going to make any difference – “Mr Hoogstraten’s already done just about everything he can do to make sure that people do not get their hands on his assets . . .”.

The application for a freezing order came before Mr Justice Rimer on 27 August 2002. He made an order restraining Mr van Hoogstraten, until the return date (10 September 2002) or further order in the meantime, from removing from England and Wales any of his assets which were in England and Wales up to the value of £5 million “or in any way disposing, dealing with or diminishing the value of his assets whether within or outside England and Wales up to the same value”. That restraint is imposed by paragraph 5 of the order. Paragraph 6 is in these terms:

Paragraph 7 of the order of 27 August 2002 identified specific assets which were to be included in the restraint imposed by paragraphs 5 and 6. Those were, first, the properties listed in schedule E to the order; and second, the properties and assets “of those businesses and enterprises listed in schedule F”. Schedule E listed a total of sixty properties, of which forty seven were identified by the land registry title number. Twenty five of those properties were registered in the name of Tombstone Limited and were included in the schedule on the basis that they were properties in which Mr van Hoogstraten was believed to have a beneficial interest. Schedule F contained a list of eighteen companies or other businesses (including Tombstone) which were said to be “businesses and enterprises owned or controlled by Mr Hoogstraten or in which he has a beneficial interest”.

Paragraphs 5, 6 and 7 are in that section of the order headed “Freezing Injunction”. A later section, headed “Provision of Information” contains paragraphs 9 and 10:

Paragraphs 6 and 9 of the order were in the standard form of freezing injunction annexed to the Practice Direction which supplements CPR Part 25 – see the form at 25PD.13, issued in July 2002. Paragraph 6 may be seen as a response to the decision of this Court in Federal Bank of the Middle East Ltd v Hadkinson and others [2000] 2 ALL ER 395 – see, in particular, the observation of Lord Justice Mummery (ibid, 409a) that “in everyday usage the expression ‘his assets’ refers to assets belonging to that person, not to assets belonging to another person”. One point taken on behalf of Mr van Hoogstraten on these appeals has been that an order in that form lacks the clarity which is essential if non-compliance is to be the subject of contempt proceedings. It is said that it is unclear whether the extended meaning given to the expression “the Respondent’s assets” in paragraph 6 – in the context of the freezing injunction imposed by paragraph 5 – is imported into the obligation to inform the applicant’s solicitors “of all his assets” which is imposed by paragraph 9. That is a question to which I shall need to return later in this judgment.

CPR 23.9(1) requires that, where a court has made an order disposing of an application which it permitted to be made without service of a copy of the application notice, a copy of the application notice and any evidence in support must, unless the court otherwise orders, be served on any person against whom the order was made. That requirement is reinforced by the provisions in schedule 1 to the Civil Procedure Rules which relate to the enforcement of judgments and orders (formerly contained in Order 45 of the Rules of the Supreme Court 1965). RSC Order 45 rule 5 provides for the enforcement of orders to do or abstain from doing an act by sequestration or committal; but Order 45 rule 7 provides that (subject to sub-rules (6) and (7) of that rule) an order shall not be enforced under rule 5 unless a copy of the order has been served personally on the person required to do or abstain from doing the act in question and (in the case of an order requiring a person to do an act) so served before the expiration of the time within which he was required to do the act. Sub-rule (6) is not in point in the present case. Sub-rule (7) enables the court to dispense with service of a copy of an order under rule 7 if it thinks it just to do so.

The order of 27 August 2002 contains no provision dispensing with service of copies of the application notice and evidence in support or with personal service of a copy of the order. Nor does it contain an order, under CPR 6.8, for service of a copy of the order by some method other than personal service. Indeed, it is difficult to see how it could have done: an application for an order permitting service by an alternative method must be supported by evidence – CPR 6.8(2). And such an order must specify the method of service and the date when the document will be deemed to be served – CPR 6.8(3). Nevertheless, the question of service on Mr van Hoogstraten was addressed at the hearing on 27 August 2002. The draft order had contained, at paragraph 3 of schedule B (Undertakings given to the Court by the Applicant) the usual undertaking by the claimant substantially in the terms set out in paragraph (5) of schedule B in the model form at 25PD. Paragraph 3 of schedule B to the order as made was in these terms:

On 29 August 2002 a representative of the claimant’s solicitors delivered copies of the order of 27 August 2002 and the supporting documentation to a prison officer at HM Prison Belmarsh. The documents were delivered with a covering letter of the same date, receipt of which was acknowledged by the officer’s signature on a copy retained by the solicitor. The solicitors’ representative was assured by the deputy governor (Mr Watt) that the documents would be given to Mr van Hoogstraten that afternoon. In those circumstances Mr Lightfoot felt able to say, in an affidavit (his fourth) sworn on 1 October 2002, that "Substituted service was therefore effected on 29th August 2002”.

Mr van Hoogstraten was required to comply with paragraphs 9(a) and 10 of the order of 27 August 2002 within 7 and 14 days (respectively) of service upon him. If the order is read with the relevant procedural rules “service”, in that context, means personal service. Not only does the order itself contain no provision for substituted service; it specifies no “date when the document will be deemed to be served” – CPR 6.8(3). Mr Lightfoot’s fourth affidavit of 1 October 2002 suggests that the claimant’s solicitors were aware, by 4 September 2002, that there were grounds for thinking that, as at that date, the prison service had not passed on to Mr van Hoogstraten the documents which had been delivered on 29 August 2002. Paragraph 12 of that affidavit is in these terms:

Nevertheless, despite the difficulties which the claimant’s solicitors were experiencing in proving that the order of 27 August 2002 had been served on Mr van Hoogstraten, it is clear that he did, in fact, receive a copy on or about 29 August 2002. That appears from an affidavit sworn by Mr van Hoogstraten some two and a half months later, on 15 November 2002. At paragraph 1 of that affidavit he deposed:

The order of 27 August 2002 had directed a further hearing on 10 September 2002 (the return date). On 28 August 2002 the claimant issued an application notice seeking the continuation of that order. The application was supported by a further affidavit of Mr Lightfoot (his third) sworn on the same day in which, as required by an undertaking given in the order of 27 August 2002, he set out the substance of what had taken place before Mr Justice Rimer when that order had been made. Paragraph 8 of that affidavit recorded Mr Lightfoot’s understanding of the directions as to service of the order:

The application notice and Mr Lightfoot’s second affidavit were amongst the documents delivered to HM Prison, Belmarsh, on 29 August 2002. Whether or not the application notice was served on Mr van Hoogstraten on that or the subsequent day, it is clear –from his later affidavit of 15 November 2002, that he came to know of the return date of 10 September 2002. His response was to file a notice of change of solicitor, dated 3 September 2002, removing Minaides Robson from the record and stating his intention to act in person. He explained his reasons for that step in the affidavit of 15 November 2002:

Between 2 September and 6 September 2002 there was correspondence between the claimant’s solicitors, Mr Minaides and an Italian lawyer, Giovanni di Stefano, who (it seems) was then expecting to be instructed by Mr van Hoogstraten in these proceedings. The effect of that correspondence, and a telephone call, was that the claimant’s solicitors agreed to ask the judge, at the hearing on 10 September 2002, to postpone the return date in the freezing order of 27 August for two weeks, to continue the order in the meantime, and to extend time for compliance with paragraph 9(a) of the order to 17 September 2002 and for compliance with paragraph 10 to 24 September 2002.

An order in those terms was made by Mr Justice Patten at a short hearing on 10 September 2002. It is clear that the judge must have been satisfied from the evidence before him – which included Mr Lightfoot’s third affidavit – that Mr van Hoogstraten had been served with the order of 27 August 2002. That appears from the fact that, in the order of 10 September 2002, the dates for compliance with paragraphs 9(a) and 10 of the earlier order were fixed (17 and 24 September 2002 respectively); they were no longer to be ascertained by reference to service. The order of 10 September 2002 substituted a revised schedule E for the schedule to the earlier order, which had the effect of reducing the properties listed to the forty seven which could be identified by land registry title numbers. The order was endorsed with a penal notice.

Mr van Hoogstraten was neither present nor represented at the hearing before Mr Justice Patten on 10 September 2002. But it appears that he had intended to be present at that hearing. In his affidavit of 15 November 2002, he explained:

The order of 10 September 2002 contains no provision for substituted service; nor does it contain any undertaking, equivalent to that in paragraph 3 of schedule B to the earlier order of 27 August 2002, to serve the order by leaving a copy with the prison governor for onward delivery to Mr van Hoogstraten). Examination of the transcript of the proceedings before Mr Justice Patten at the hearing on 10 September 2002 shows that no application for substituted service was made to that judge. It may have been thought that the point was already covered by the earlier order. That, I think, would have been a misconception of the true position.

A copy of the order of 10 September 2002 was sent to the Governor at Belmarsh, with a copy letter addressed to Mr van Hoogstraten, under cover of a letter of 11 September 2002 which requested that these “be passed to Mr Hoogstraten as a matter of urgency”. There is nothing in the material before this Court to indicate whether or not that was done. On 12 September 2002 Mr David Englehart, who had been informed of the order of 10 September 2002 by Mr Lightfoot in a telephone call, wrote to the claimant’s solicitors a letter which contained this paragraph:

Mr van Hoogstraten’s letter of 10 September 2002 makes it plain that he wanted to challenge the freezing order of 27 August 2002. Mr Justice Patten replied to that letter through his clerk. In a letter of 20 September 2002 his clerk wrote that:

Mr van Hoogstraten followed the advice that he had been given in the letter of 20 September 2002. On 25 September 2002 he issued an application to set aside the order of 27 August 2002. He referred to that application in a letter to Mr Justice Peter Smith dated 17 October 2002:

On 2 October 2002 the claimant issued an application notice for the committal of Mr van Hoogstraten. The grounds stated in the application notice were that Mr van Hoogstraten was in contempt of court in that he had failed (i) in breach of paragraph 9(a) of the order of 27 August 2002 (as varied by the order of 10 September 2002) to inform the claimant’s solicitors by 17 September 2002 to the best of his ability “of all his assets worldwide exceeding £10,000 in value whether in his own name or not on (sic) whether solely or jointly owned, giving the value, location details of all such assets” and (ii) in breach of paragraph 10 of those orders by 24th September 2002 to swear and serve on the claimant’s solicitors an affidavit “setting out the information referred to” .

That application was supported by Mr Lightfoot’s fourth affidavit of 1 October 2002, to which I have already referred. That affidavit had set out Mr Lightfoot’s concerns as to the efficacy of service through the office of the prison governor. In a later paragraph of that affidavit Mr Lightfoot deposed:

The application notice, with a draft of the committal order sought, and the affidavit in support were sent to the prison governor under cover of a letter dated 3 October 2002; and were handed to Mr van Hoogstraten by a prison officer on 5 October 2002 – as the endorsement on the letter confirms. Personal service of an application to commit is required (RSC Order 52 rule 4(2) and must, unless the court otherwise directs, be effected not less than 14 days before the hearing (paragraph 4.2 of the Practice Direction – Committal Applications which supplements RSC Order 52 in schedule 1 to the Civil Procedure Rules). There was nothing in the application notice, or in the covering letter, which suggested that the claimant had obtained, or intended to seek, an order abridging the time between service and the hearing.

The application for committal came before Mr Justice Peter Smith for hearing on 11 October 2002. Mr van Hoogstraten – who, as I have said, had given notice on 3 September 2002 of his intention to act in person – was not present. It appears, from his letter of 17 October 2002 to Mr Justice Peter Smith (to which I have already referred, that he had sought to make the necessary arrangements to attend; but that that had not led to his production by the prison service. He wrote:

The transcript of the proceedings before Mr Justice Peter Smith on 11 October 2002 shows that the judge was told that Mr van Hoogstraten had asked to be produced at that hearing. He was told that by counsel (Miss Dorrell) who acted for Mr van Hoogstraten in the criminal proceedings and who, as she said, had been in the Royal Courts of Justice on that day (in another matter) and had noticed that the committal proceedings were listed. The following interchange between the judge and counsel is of importance:

It was in those circumstances that the judge decided to proceed to hear the committal application in the absence of Mr van Hoogstraten, against whom a finding of contempt was sought; and to abridge the time which, under the rules, should have elapsed between service of the applications and the hearing, in order to enable the hearing to proceed. It is pertinent, also, to have in mind that the application to commit proceeded notwithstanding that Mr van Hoogstraten had challenged the orders of 27 August and 10 September 2002 upon which the alleged contempt was based; and that his application to set aside those orders had not been heard. The judge was not aware of that at the time. But, had he adopted Miss Dorrell’s suggestion and adjourned the hearing to enable Mr van Hoogstraten to be produced by the prison service, he would have become aware that the application to set aside the earlier orders was outstanding.

The judge expressed his reasons in the following paragraphs of the short judgment which he gave on 11 October 2002:

The judge then turned to consider what he should do about the contempt which he had just found. He expressed the view that a sentence of imprisonment would be “of utter indifference” to Mr van Hoogstraten in the circumstances that he was awaiting sentence for manslaughter. He held that the appropriate way to mark the contempt was by a fine of £200,000, to be suspended for 28 days – that is to say, until 8 November 2002. He went to say this:

The order of 11 October 2002 incorporates the findings of contempt in failing to provide information by 17 September 2002 and to verify that information in an affidavit by 24 September 2002; and it imposed the sanction of successive, and escalating, fines in respect of that contempt. It continued the freezing orders, made without notice, until trial or further order. And it directed that Mr van Hoogstraten should pay the costs of the committal application.

A copy of the order of 11 October 2002 was provided to Mr van Hoogstraten on 17 October 2002 by the assistant prison governor. Upon receipt of the copy order Mr van Hoogstraten wrote to the judge. I have already referred to parts of that letter. It referred to the application to set aside the order of 27 August 2002, made by notice dated 25 September 2002; to the fact that that application had not been heard; and to the circumstances in which Mr van Hoogstraten had not been produced at court on 11 October 2002. The letter continued:

The reference in that letter to “article 6 of the HRA 1998” is plainly intended as a reference to article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms, incorporated within schedule 1 to the Human Rights Act 1998. So far as material, the article is in these terms:

The judge, himself, replied to Mr van Hoogstraten’s letter. On 22 October 2002 he wrote:

Mr van Hoogstraten did not attend a hearing on 24 October 2002. The reason appears from his affidavit of 15 November 2002, to which I have already referred. He deposed:

But the judge did not know that at the time. He thought that Mr van Hoogstraten had chosen not to attend. He wrote to Mr van Hoogstraten on 24 October 2002 in these terms:

By the order which he made on 24 October 2002 the judge directed that the claimant’s costs of that hearing be paid by Mr van Hoogstraten on an indemnity basis; he assessed those costs summarily and ordered that they be paid forthwith.

On 31 October 2002 the proceedings were before Mr Justice Peter Smith on the claimant’s application for directions made by notice dated 22 October 2002. Mr van Hoogstraten was present in person. He raised with the judge the question whether (and if so when) his application of 25 September 2002 might be heard. The judge’s response appears from the following passage in the transcript:

The passage which I have just set out is of importance, because it encapsulates an issue which, as it seems to me, required careful and informed consideration – with the benefit of legal argument – at an early stage after Mr van Hoogstraten had made his application on 25 September 2002. It will be in mind that Mr van Hoogstraten had indicated his intention to make that application by a letter to the court of 10 September 2002; that is to say before the time for complying with Mr Justice Rimer’s order as varied by Mr Justice Patten’s order had expired. The issue is whether a party who is required to make disclosure under a freezing order made in his absence, and who has indicated to the court at an early opportunity (and, in particular, before the time for complying with the order has passed) that he wishes to challenge the basis upon which the freezing order was made, is, nevertheless, required to comply with the obligation to make disclosure before his application to set aside the order has been heard; so that, on his failure or refusal to comply with the obligation to make disclosure under the challenged order, the court is entitled to refuse entertain his application.

The judge, without hearing argument but on the basis of authorities to the existence of which he referred (without identifying them), decided that issue against Mr van Hoogstraten. If he were correct in his understanding of the law, the likely result is that either the party against whom the order was made complies with the obligation to disclose, in which case there is little or no purpose thereafter in a challenge to that part of the order because the information which he was concerned to protect from disclosure has already been disclosed; or he continues to refuse to comply with that obligation, in which case the question whether or not the order made in his absence was properly made is never resolved at a hearing at which he is able to advance his arguments. A rule of law which requires a party who has challenged timeously an obligation to disclose to comply with that obligation before his challenge is heard – in circumstances that, having complied with the order, the information will not be retrievable even if his challenge is successful – may, not unfairly, be described as “putting the cart before the horse”.

It is probable that, amongst the authorities which the judge had in mind when deciding that issue as he did, was the decision of this Court in Motorola Credit Corp v Uzan and others [2002] EWCA Civ 989, [2002] 2 All ER (Comm) 945. It will be necessary, later in this judgment, to consider whether the judgments of the majority in that appeal go as far as the judge seems to have thought.

Notwithstanding the views which the judge had expressed at the hearing on 31 October 2002, Mr van Hoogstraten issued a further application notice, dated 11 November 2002, seeking to set aside the order of 27 August 2002 “and all subsequent orders relating to the freezing order”. As he stated in the application notice “This application was originally submitted the court on 25-09-02 following on from my letter to the court of 10-09-02”. The application notice included the following paragraphs:

The judge’s order of 31 October 2002 had provided that unless Mr van Hoogstraten served, by 11 November 2002, an amended defence pleading to the re-amendments to the particulars of claim for which permission had been given on 4 July 2002, he should be debarred from challenging anything alleged by those re- amendments; and had directed that he serve, by 8 November 2002, any evidence on which he wished to rely in opposition to the claimant’s strike out application of 8 August 2002. The remainder of the claimant’s application for directions, under the notice of 22 October 2002, was stood over to a case management conference to be held between 11 and 13 November 2002.

On 13 November 2002 the strike out application of 8 August 2002 was adjourned to 27 November 2002 and time for the service of evidence on that application was extended to 20 November 2002. Time for complying with paragraph 9(a) of the order of 27 August 2002 was also extended to 20 November 2002; and it was directed that, in default, “the Defence and Counterclaim be struck out and the Defendant will be debarred from defending and the claimant will be entitled to seek judgment in the from considered appropriate by the Court on the relief sought”. It was directed, also, that Mr van Hoogstraten should not be entitled to avoid compliance with paragraph 9(a) of the order of 27 August 2002 “by reason of anything contained in paragraph 9(b)”. That had the effect of removing the protection against self incrimination. Further, the defence and counterclaim were to be struck out, Mr van Hoogstraten was to be debarred from defending and the claimant was to be entitled to judgment unless the outstanding costs orders made on 11 and 24 October 2002 were paid by 20 November 2002. Time for payment of the fines imposed on 11 October 2002 was extended to 27 November 2002 “when the question of those fines shall be further considered”. And the claimant was given permission to issue an application for leave to sequestrate Mr van Hoogstraten’s assets, also returnable on 27 November 2002.

On 15 November 2002 the claimant amended the application notice of 8 August 2002 so as to include as additional grounds for striking out the defence and counterclaim:

Also on that date, 15 November 2002, Mr van Hoogstraten signed a statement, described as an affidavit, in purported compliance with paragraph 9(a) of the order of 27 August 2002 and paragraph 2 of the order of 13 November 2002. In that statement he set out a list of what, as he said, were his worldwide assets exceeding £10,000 in value. The total value of the assets disclosed is £960,000, although the value of some of the assets is said to be an approximation. Mr van Hoogstraten did not include in that list the properties and businesses listed in schedules D and E of the order of 27 August 2002.

A few days later, on 19 November 2002, Mr van Hoogstraten swore a second affidavit disclosing that he owned a number of properties in Cannes with a value of over £2 million, and had a bank account with a French bank.

The matter was back before Mr Justice Peter Smith on 20 November 2002 on the hearing of Mr van Hoogstraten’s applications to extend time for evidence and to adjourn the hearing of the application to strike out. At that hearing Mr van Hoogstraten was represented by counsel. The judge refused to adjourn the hearing of the application to strike out. Accordingly that application was before him on 27 November 2002; but, at that hearing, he did agree to adjourn it to 9 December 2002. He also extended the time for payment of the fines imposed by the order of 11 October 2002 to 9 December 2002 with, again, the indication that, at that hearing, “the question of those fines shall be further considered”. He made a summary assessment of the costs of the hearing on 20 November 2002; directed that those costs be paid by 4 December 2002; and ordered that, in default of payment, Mr van Hoogstraten should be debarred from defending and the claimant be entitled to seek judgment.

Mr van Hoogstraten was represented by counsel (Mr Reza) at the hearing on 27 November 2002. He was also present himself for most of that hearing, although the arrangements which had been made for his production (at the direction of the judge) did not enable him to be in court until some time after the hearing had commenced. The judge explained how he was intending to approach the matter:

The adjourned hearing of the application to strike out took place on 9 and 10 December 2002. Mr van Hoogstraten was, again, represented by counsel, Mr Reza; and was, himself, present. It appears that no transcript of the proceedings on those days is available. But it is clear that Mr van Hoogstraten did not give oral evidence, as had been canvassed at the hearing on 27 November 2002 – see paragraph 74 of the judgment of 12 December 2002.

On 10 December 2002, pursuant (I think) to permission granted on the previous day, the claimant added a further ground to the application to strike out: “that the First Defendant had failed to comply with the Unless Order in paragraph 3 of the Order dated 13th November 2002”. That paragraph had required Mr van Hoogstraten to file an affidavit by 20 November 2002 complying with paragraph 9(a) of the order of 27 August 2002.

On 12 December 2002 the judge handed down a written judgment, setting out the reasons for his decision on the claimant’s application to strike out Mr van Hoogstraten’s defence and counterclaim; and on the application for leave to issue a writ of sequestration. The order which he made that day contained the following provisions, so far as material in the context of the present appeals. Paragraph 1 ordered that Mr van Hoogstraten’s defence and counterclaim be struck out and that he be debarred from defending the action on liability. Paragraph 2 directed that judgment be entered for the claimant (a) for all necessary accounts and inquiries to establish quantum (including damages for conspiracy), (b) for payment of all sums due on taking that account, and (c) for the delivery up of land certificates and the execution of transfers in respect of five properties. Paragraph 5 ordered an interim payment on account in the sum of £400,000. Paragraph 6 gave leave to issue a writ of sequestration; and paragraph 7 refused a stay. Paragraph 12 was in these terms:

The judgment of 12 December 2002 contains a full account of the procedural background which had led to the hearing of the application to strike out. In setting out that history, the judge took the opportunity to explain further the reasons which had led him to make earlier orders; in particular, the order of 11 October 2002 in which he had found Mr van Hoogstraten to be in contempt. In that context the following passages are material:

The judge then went on to consider whether, following the order of 11 October 2002, Mr van Hoogstraten had complied with the disclosure obligations imposed by the orders of 27 August and 10 September 2002. In particular, he considered whether the two affidavits of 15 and 19 November 2002 were a sufficient compliance with those obligations. He held that they were not. After referring to Mr Lightfoot’s fifth affidavit, sworn on 25 November 2002, the judge said this, at paragraph 76:

Time for compliance with the disclosure obligations had been extended, by the order of 13 November 2002, to 20 November 2002. As I have said, that order provided that, in default of compliance, the defence and counterclaim should be struck out. Notwithstanding his conclusion, in paragraph 76 of his judgment, that Mr van Hoogstraten was in default by reason of his failure to deal with more than his own personal assets, the judge thought it necessary (or, at least, appropriate) to consider whether the affidavits of 15 and 19 November 2002, taken with a further affidavit which Mr van Hoogstraten had sworn in response to Mr Lightfoot’s fifth affidavit, made true and complete disclosure of what might be regarded as personal assets. He said this, at paragraphs 77 and 79:

The judge reached that conclusion on the basis of his review, at paragraphs 81 to 96, of evidence relating to Hamilton Palace, Tombstone Ltd and an antique collection. It is unnecessary to examine the judge’s findings on those matters at any length in this judgment because counsel for Mr van Hoogstraten explained that he was not in a position, on the hearing of these appeals, to challenge those findings by any detailed analysis of the underlying material. He sought to reserve a detailed challenge to a subsequent hearing, should it become necessary to pursue it. It is enough, therefore to note that the judge said this, at paragraphs 97 and 99:

In the light of those findings, the judge held that Mr van Hoogstraten’s defence and counterclaim should be struck out, and that he should be debarred from defending the action. His conclusion, on that point, is found at paragraphs 100 and 101:

The judge then considered the further ground relied on in the application notice of 8 August 2002:

The judge accepted that it was necessary for the claimant to show that the conduct of which he complained was motivated by an intention, on the part of Mr van Hoogstraten, to hinder or obstruct the trial. But he was satisfied that that motive had been made out. He said this:

The application notice of 8 August 2002, as amended and re-amended, advanced other grounds for striking out the defence and counterclaim, in addition to those which attracted the judge and to which I have just referred – continuing failure to comply with the obligation to disclose information and conduct which had put the fairness of any trial in jeopardy. Those other grounds were (i) the discharge of legal expenses without identifying the source of funding, (ii) failure to discharge costs orders in respect of the hearings on 11 and 24 October 2002 and (iii) failure to comply with case management directions given on 4 July 2002. The judge said nothing, in his judgment of 12 December 2002, as to the second and third of those additional grounds. He made it clear, at paragraph 115, that he was not persuaded that the breach of the obligation not to discharge legal expenses without disclosing the source of funding would justify striking out. He was prepared to accept, on the evidence which was before him, that there might be an innocent explanation for that failure. But he required the lawyers advising Mr van Hoogstraten at the time, Mr di Stefano and Mr Englehart, to make affidavits setting out in full the advice that they had given to Mr van Hoogstraten as to the need to comply with that obligation.

In the event, therefore, the judge’s decision to strike out Mr van Hoogstraten’s defence and counterclaim – and to enter judgment against him on liability – was founded on two grounds: (i) continuing failure to comply with the obligations to disclose information imposed by the order of 27 August 2002 (as varied by the orders of 10 September and 11 October 2002) and made the subject of an “unless order” on 13 November 2002 and (ii) conduct in relation to Mr Mohammed Raja which had put the fairness of any trial in jeopardy.

The judge had directed, in the orders which he had made on 13 and 27 November 2002, that “the question of those fines [imposed on 11 October 2002]” would be considered further. He addressed that question in paragraphs 121 to 123 of the judgment which he handed down on 12 December 2002:

The judge was, of course, aware that there was an outstanding application, filed by Mr van Hoogstraten, for an order that the order of 27 August 2002 (as varied by the order of 10 September 2002) be set aside or discharged. That application had been made by notice dated 25 September 2002; and, again, by notice dated 11 November 2002. The judge was not prepared to entertain those applications. At paragraph 39 of his 12 December 2002 judgment he said this:

The order made on 12 December 2002 gave the claimant leave to issue a writ of sequestration. The writ was issued on that day and amended on the following day, 13 December 2002. As amended, it authorised the sequestrators (who were partners or employees of BDO Stoy Hayward) (i) to enter upon and take possession of all the real and personal estate of Mr van Hoogstraten, to collect, receive and take into their hands the rents and profits of his real estate and all his personal estate and (iii) to keep the same under sequestration in their hands until Mr van Hoogstraten “shall comply with the order dated 27 August 2002 has purged his contempt and/or the sums identified in paragraph (b)(i)-(iii) above have been recovered and/or the court makes other order to the contrary”. In that context the “sums identified in paragraph (b)(i)-(iii)” of the writ were: (i) the fines, as varied on 12 December 2002, (ii) “any sums found due to the Claimants both as to damages and costs” including, but not limited to, the sum of £400,000 to be paid on account of damages and the sum of £200,000 to be paid on account of the claimant’s costs and (iii) “such other sums as the Court shall direct”.

Paragraph (c) in the recitals to the writ of sequestration was in these terms:

The inclusion of paragraph (c) in the recitals to the writ of sequestration has led the sequestrators to take the view, correctly as it seems to me, that the assets subject to the sequestration include all the assets held in the name of Tombstone Limited. That, in turn, led to applications by the registered holders of the majority of the shares in Tombstone (Willoughbys Consolidated Plc and Ms Rosemary Hamilton) – and, eventually, by Tombstone itself - to intervene so as to challenge the finding (if there were a finding) that Tombstone holds its assets as trustee for Mr van Hoogstraten. Those various applications came before Mr Justice Peter Smith in the first six months of 2003. He refused leave to intervene. For present purposes it is necessary only to refer to his order of 27 June 2003, refusing to allow an intervention by Tombstone.

The inclusion of paragraph (c) led, also, to applications by the sequestrators for directions in relation to the realisation of Tombstone properties. Directions were given by Mr Justice Peter Smith in an order made on 10 February 2003. Those directions enlarged the powers of the sequestrators under the writ of sequestration; and required Mr van Hoogstraten to answer requests for information contained in a letter from the sequestrators dated 23 December 2002 and to provide full details of the extent and location of the art and antiques collection which he was said to own. Payment to Mr van Hoogstraten’s solicitors, Minaides Robson, of monies out of the sequestrated assets on account of outstanding or future legal costs was made conditional upon compliance with those requirements.

The judge refused permission to appeal from his orders of 12 December 2002 and 10 February 2003. On 12 March 2003 Mr van Hoogstraten filed two appellant’s notices. The first, under reference 2003/0537, sought to appeal from the orders of 27 November and 12 December 2002 “and (if necessary) 10 September 2002 and 11 October 2002”. The second, under reference 2003/0538, sought to appeal from the order of 10 February 2003. On 16 April 2003 he filed three further notices, under references 2003/0579, 0580 and 0581. By those further notices Mr van Hoogstraten sought to appeal from, respectively, the orders of 10 September, 11 October and 27 November 2002. Those notices may be seen as supplementary to that under reference 2003/0537; and they add nothing of substance to that earlier notice.

Permission to appeal from the order of 12 December 2002 and from “all the orders on which that order was based such orders to include those made on 10 September 2002, 11 October 2002, and 27 November 2002” was granted by this Court (Mr Justice Cresswell and myself) on 13 June 2003. Permission was granted “without prejudice to any argument that the Claimant may wish to advance on the hearing of the appeals that the First Defendant ought not to be heard on his appeals against any of the said orders because the First Defendant is alleged to be in contempt and making no attempt to purge that contempt”. At the same hearing we granted permission to appeal from the order of 10 February 2003.

The judge refused permission, also, to appeal from his order of 27 June 2003 – by which he had refused Tombstone leave to intervene in the proceedings. Permission to appeal from that order was granted by this Court on the same day; but on terms that that appeal was to be heard with the substantive appeals for which permission had been granted on 13 June 2003 and that (if that appeal were successful) Tombstone would take part in the substantive appeals – in order to assert its own beneficial interest in properties subject to the sequestration order - without seeking any adjournment. That appeal is brought under reference 2003/1704.

It is common ground that, if on the hearing of Mr van Hoogstraten’s appeal from the order of 12 December 2002 the writ of sequestration is set aside, the basis upon which Tombstone seeks to intervene in these proceedings – and the need for Tombstone to intervene in order to protect its interests – will fall away. It is also, I think, common ground that, if the writ of sequestration is set aside, there is little (if anything) left in the appeal from the order of 10 February 2003. The sequestrators will no longer require information from Mr van Hoogstraten, as they will no longer have a continuing function to perform.

In the course of the applications for permission to appeal made to this Court on 13 June 2003 the Court was urged to fix an early date for the hearing of the appeals (if permission were granted) on the basis that the sequestrators were incurring substantial costs which, prima facie at least, would fall on the sequestrated properties even if the appeals were to be successful. The Court accepted the need for an early fixture of what was estimated to be a five-day hearing. Arrangements were made for the appeals to be heard in November 2003. That hearing was adjourned, on the application of Mr van Hoogstraten and Tombstone, for the reasons set out in the judgment of the Court (Lord Justice Pill and myself) delivered on 12 November 2003. The hearing was refixed for the week commencing 29 March 2004.

One effect of the adjournment was that, when the matter came back before the Court at the end of March 2004, Mr van Hoogstraten was no longer in prison; and was no longer facing criminal proceedings arising out of the death of Mr Mohammed Raja. On 29 March 2004 he sought a further adjournment to enable him to instruct solicitors and counsel to represent him at the hearing of these appeals. For the reasons given in the judgment delivered on 30 March 2004, we were persuaded that, in the very exceptional circumstances of this case, it was right to grant a second adjournment. The appeals were heard in the week commencing 10 May 2004. But, notwithstanding what I would accept as real efforts to instruct counsel in time to enable them to prepare a full argument, the position at the hearing was, as I have said, that counsel for Mr van Hoogstraten had not found it possible, in the time available, to mount a challenge to the judge’s findings as to beneficial ownership by the detailed analysis of the underlying material which such a challenge would have required; and so sought to reserve a detailed challenge to a subsequent hearing, should it become necessary to pursue it. The appeals were heard on that basis; it being clear that there were a number of points of principle which could and should be addressed before considering the judge’s findings as to beneficial ownership.

As I have said, permission to appeal was granted by this Court on 13 June 2003 without prejudice to any contention that Mr van Hoogstraten ought not to be heard on his appeals in circumstances that he was making no attempt to purge the contempt which Mr Justice Peter Smith had found established. That contention was advanced on behalf of the claimant at the outset of the hearing of these appeals. After hearing argument on that threshold issue, we indicated that we would proceed to hear the substantive appeals. It is necessary, now, to set out the reasons which led us to the conclusion that this was not a case in which an alleged contemnor should be denied the opportunity to appeal without first purging his contempt.

That an appellate court may refuse to hear a party who has been found to be in contempt and who has made no attempt to purge that contempt is not in doubt – see Hadkinson v Hadkinson [1952] P 285, Astro Exito Navegacion SA v Southland Enterprise Co Ltd (The Messiniaki Tolmi) [1981] 2 Lloyd’s Rep 595 and X Ltd v Morgan Grampian (Publishers) Ltd and others [1991] 1 AC 1. But it is now recognised that there is no general rule that a court will not hear an application for his own benefit by a person in contempt unless until he has first purged his contempt; so that, in order to avoid the application of that rule the party in contempt must bring himself within some established exception. The approach which the court should adopt is now found in the judgment of Lord Bingham of Cornhill, Chief Justice, in Arab Monetary Fund v Hashim and others (unreported, 21 March 1997). After referring to the speeches of Lord Bridge of Harwich and Lord Oliver of Aylmerton in X Ltd v Morgan Grampian, Lord Bingham said this:

Adopting that approach in the present case, I thought it reasonably plain that the interests of justice were best served by hearing Mr van Hoogstraten’s appeals, notwithstanding that he had been held to be in contempt and to have made no serious attempt to purge that contempt. In reaching that conclusion I took account of the following matters:

The principal issues for decision, each of which arises in the context of the appeal under reference 2003/0537 and the first of which is raised, also, by the appeal under reference 2003/0580, are (i) whether the judge was wrong, on 11 October 2002, to make a finding of contempt against Mr van Hoogstraten and (ii) whether the judge was wrong, on 12 December 2002, to strike out the defence and counterclaim and to enter judgment in the action for the claimant.

Decisions in favour of Mr van Hoogstraten on those principal issues will dispose of most of the other matters raised by the appeals which are before us. As I have said, it is common ground that, if the judge was wrong to make a finding of contempt against Mr van Hoogstraten, the writ of sequestration must be set aside; there being no sufficient basis, in the absence of a finding of contempt, to support a sequestration for the purpose, only, of enforcing orders for the interim payment of damages and costs. And, in that event, the question whether Tombstone should be allowed to intervene, raised by the appeal under reference 2003/1704, falls away and there is little left in the challenge to the directions given to the sequestrators by the order of 10 February 2003, raised by the appeal under reference 2003/0538.

There are two matters which do not turn on the decisions on the principal issues. Those matters are (i) whether Mr Justice Patten was wrong to make the order of 10 September 2002 – raised by the appeals under references 2003/0537 and 0579 – and (ii) whether Mr Justice Peter Smith was wrong to make the costs order which he did on 24 October 2002.

It is convenient to address the first of those matters in the context of the order of 11 October 2002. It is arguable that the second is not formally before this Court, in that the costs order of 24 October 2002 is not the subject of a discrete challenge in any appellant’s notice. But a challenge to that order was raised in the course of the hearing; there is no answer to it; and, for my part I would dispose of that matter summarily. The costs order of 24 October 2002 cannot stand. The order was made on the basis that Mr van Hoogstraten had chosen not to attend on that date, notwithstanding that the judge had ordered that he be produced; as the judge explained in his letter of 24 October 2002. But that was a false basis, as the judge acknowledged in paragraph 15 of his judgment of 12 December 2002. The costs order of 24 October 2002 should be set aside.

It is pertinent to have in mind that the order of 27 August 2002 (as varied by the order of 10 September 2002) had required Mr van Hoogstraten to provide information by 17 September 2002 and to confirm that information by affidavit on or before 24 September 2002. When the application to commit Mr van Hoogstraten to prison for breach of those orders came before Mr Justice Peter Smith on 11 October 2002 Mr van Hoogstraten had provided no information and sworn no affidavit. This was not a case where, on 11 October 2002, the judge was required to decide whether information which had been provided complied with the earlier orders. There was, plainly, a failure to comply with those orders. The judge saw the position in those terms. That appears from the observation which he made in answer to the suggestion (by counsel, Miss Dorrell) that Mr van Hoogstraten ought to be present which I have set out earlier in this judgment:

The judge’s answer to that question is found, first in the judgment which he delivered on 11 October 2002:

The judge returned to the point in his judgment of 12 December 2002. By that date he did know of the application notice of 25 September 2002. He said this:

I find that approach startling. In the first place it gives no recognition to the rights conferred by article 6(3) of the Convention – to which Mr van Hoogstraten had, himself, referred in his letter to the judge of 17 October 2002. As I have said, it is accepted on behalf of the claimant that a person facing committal proceedings is entitled, as a minimum, to the protection afforded by that article – in addition to the right to a fair and public hearing conferred by article 6(1). The protection under article 6(3) includes the right to have adequate time and facilities for the preparation of a defence, the right to defend oneself in person and the right to examine witnesses.

The judge knew, on 11 October 2002, that Mr van Hoogstraten wanted to defend himself in person. He had been told that by Miss Dorrell. He knew that Mr van Hoogstraten was not present because (for whatever reason) the prison service had taken the view that he was not required. It is reasonable to suppose that he would have known (if the court office had put the court file or the application notice before him) that Mr van Hoogstraten wished to challenge the claimant’s witnesses. Although no copy of the application notice of 25 September 2002 has been made available, Mr van Hoogstraten’s intention to expose the “lies” of those who have testified against him has been a consistent feature of his letters, affidavits and submissions – see, in particular, his letter to the court dated 10 September 2002. And the judge knew that procedural safeguards by which rules of court seek to ensure that a person charged with contempt has an adequate opportunity to prepare an answer to that charge had not been observed.

In that latter context it is pertinent to have in mind that the rules were not observed in the following respects:

For my part, I find it impossible to accept that it can be right (save, perhaps, in wholly exceptional circumstances the nature of which I cannot envisage), or consistent with the Convention rights embodied in article 6(3), for a judge to proceed with an effective hearing of an application to commit - in circumstances where he knows that the alleged contemnor wishes to be heard in person but is prevented from being present by matters over which he has no control – on the grounds that, if he were present, there would be nothing that he could say that would alter the judge’s pre-conceived view that the contempt was established. That approach, as it seems to me, suggests that the judge has already closed his mind to the possibility that there is anything to be said by the alleged contemnor in his own defence. I cannot see how that can be thought compatible with the proper discharge of the judicial function. But, if that is not of itself a sufficient reason to hold that the finding of contempt ought not to have been made on 11 October 2002, there is the secondary point that, as it seems to me, the judge was wrong to take the view that, in this case, there was nothing that could have been said by or on behalf of Mr van Hoogstraten which might or ought to have led to a decision not to make a finding of contempt on that day.

There were a number of points which could have been made on 11 October 2002. First, there is obvious force in a submission that this was a case in which a freezing order should not have been sought without notice – for the reasons canvassed earlier in this judgment. Second, if (as Mr Justice Rimer was told by the claimant’s counsel at the hearing on 27 August 2002) “Mr Hoogstraten had already done just about everything he could do to make sure that people do not get their hands on his assets”, for what proper purpose was a freezing order required? Third, given the relatively small sums claimed in the proceedings (small, that is, in relation to Mr van Hoogstraten’s alleged wealth) and the assets which were identified in schedule E to the order why was it necessary to have an order which extended to worldwide assets? Fourth, given the assets which were identified in schedule E, why was it necessary to require disclosure of worldwide assets? Fifth, if it were necessary to have an order for disclosure in this case, did the requirement, in clause 9(a) of the order of 27 August 2002, that Mr van Hoogstraten give information “of all his assets worldwide . . . whether in his own name or not and whether solely or jointly owned” extend to “any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own”; and, if so, to assets “which a third party holds or controls . . . in accordance with his direct or indirect instruction”? Sixth, if so, was that sufficiently clear on the face of the order; and was that a sensible and proper requirement to impose in the circumstances of this case?

The last of those points merits some elaboration. As I have said, paragraph 6 of the order of 27 August 2002 is in standard form and may be seen as a response to the decision of this Court in Federal Bank of the Middle East Ltd v Hadkinson and others [2000] 2 ALL ER 395. As an adjunct to the restraint imposed by paragraph 5, paragraph 6 seems unobjectionable. The party on whom the restraint is imposed knows that he must not deal with, diminish or dispose of any asset (whether or not held in his name) in respect of which he has the power to dispose or deal with “as if were his own”; and that he will be regarded as having power to dispose or deal with an asset if the third party who holds the asset acts in accordance with his direct or indirect instructions. But, in relation to the disclosure of information, paragraph 6 presents much more difficulty. It is one thing to know that you must not give an instruction which a third party might act upon (paragraph 5); it is quite another to have to identify all cases in which, if you did give an instruction, a third party would or might act upon it. And does the requirement extend to cases in which the third party who holds or controls the asset may choose whether or not to act in accordance with the instruction; or only to cases in which the third party can be compelled by law to act in accordance with the instruction?

These questions are not fanciful. If Mr van Hoogstraten has chosen to arrange his affairs in the manner suggested by Mr Lightfoot in his various affidavits, then it is probable that he has taken care (with the benefit of skilled advisers) to do so in a way which enables him to assert (correctly as a matter of legal analysis) that assets in the names of corporate bodies, trusts or foundations are not assets which he owns beneficially; and are not assets over which he has a power of control. That is not, of course, to say that those in whose names such assets are held are not likely, in practice, to act in accordance with his instructions: it is simply to recognise that the reasons which lead those who arrange their affairs in the manner to which Mr Lightfoot deposes will often require that those in whose names the assets are held are not under any enforceable obligation to do so.

There are, therefore, good reasons why the extended meaning given to the expression “the Respondent’s assets” by paragraph 6 of the order of 27 August 2002 should be confined to the restraint imposed by paragraph 5; and should not enlarge the meaning of the expression “all of his assets . . . whether in his own name or not and whether solely or jointly owned” in paragraph 9(a). And, if that extended meaning is intended to have effect in the context of the obligation to disclose information, there are real questions as to the extent of that disclosure obligation. Is the party on whom the obligation to disclose is imposed required to identify all those individuals, corporate bodies, trusts or foundations who (although they could not be compelled to do so) might be expected to deal with their assets in accordance with his wishes?

The contempt alleged in the application notice for the committal of Mr van Hoogstraten was failure to make disclosure by the dates specified in the order of 10 September 2002. A further point which could have been made on 11 October 2002 was that the order of 10 September 2002 had been made on a false basis; for the reasons which I have already explained. That order was made on the basis that the earlier order of 27 August 2002 had been served on Mr van Hoogstraten. But there was no evidence of personal service; and no order for substituted service. The order was made at a hearing at which Mr van Hoogstraten was neither present nor represented. In those circumstances the appropriate order, on 10 September 2002, would have been an order extending time for compliance with the disclosure obligations for a period commencing with the service of that order; not to dates which were fixed without reference to service. In my view paragraphs 3 and 4 of the order of 10 September 2002 cannot stand; and ought now to be set aside by orders made in the appeals under references 2003/0537 and 0579.

It may, perhaps, be assumed that the judge’s answer to all those points, if Mr van Hoogstraten had been given an opportunity to make them at the hearing on 11 October 2002, would have been that subsequently given in his letter of 24 October 2002:

The suggestion, earlier in this judgment, that the authorities which the judge then had in mind included the decision of this Court in Motorola Credit Corp v Uzan and others [2002] EWCA Civ 989, [2002] 2 All ER (Comm) 945 is borne out by his reference to that decision in his judgment of 12 December 2002. It is necessary, therefore, to examine in the light of the judgments in that appeal whether and in what circumstances a party is required to comply with obligations to make disclosure imposed by an order of the court which has been made without notice to him before he has had an opportunity to be heard on the question whether the order setting aside those obligations should be set aside. But it is, I think, plain that there is nothing in those judgments which supports the proposition that a party can or should be held in contempt if he has failed to comply with obligations to make disclosure imposed by an order of the court which has been made without notice to him and which he has sought to have set aside before he has, at the least, had an opportunity to be heard on the question whether he is bound to do so while his application to set aside is pending.

The relevant facts which gave rise to the appeal in Motorola v Uzan (supra) may be stated shortly. The claimant, Motorola, obtained a worldwide freezing order in the High Court, in aid of proceedings between the parties in the United States of America, on 30 May 2002. There had been earlier freezing orders restricted to assets within the jurisdiction of the English court, but those are not material in the present context. The order of 30 May 2002 was made at a hearing without notice. It included a provision requiring the respondents, within ten working days of service of the order, to make disclosure of their worldwide assets – in terms similar to those contained in paragraph 9(a) of the order made on 27 August 2002 in the present case. On 10 June 2002 – that is to say, before the time for compliance with the disclosure obligations expired - the first defendant applied to set aside the freezing order and for a stay of the obligation to make disclosure in the meantime. The application for a stay was treated as urgent. It came before Mr Justice David Steel on 13 June 2002. He refused to stay the obligation to make disclosure. On 14 June 2002 the fourth defendant made a similar application for a stay, which was refused by Mr Justice Toulson on 17 June 2002. Appeals against the orders of 13 and 17 June 2002 were heard in this Court (Lord Woolf, Chief Justice, Lord Justice Waller and Lord Justice Sedley) on 26 June 2002. The appeals were dismissed, Lord Justice Sedley dissenting.

After referring to the decision of this Court in Grupo Torras SA v Al-Sabah (1994, Court of Appeal transcript 194) Lord Justice Waller said this:

The problem in cases where an order for disclosure has been made at the same time as, and in order to give teeth to, a freezing order made without notice to the defendant is that the freezing order may be set aside after hearing full argument on both sides. If so, it will then be seen that there was no proper basis for the disclosure order. But, by that time, the defendant may have been irremediably prejudiced by the disclosure of assets which he should not have been required to disclose. On the other hand, if it is held after full argument that the freezing order should stand, then the claimant may be irremediably prejudiced if the order has not been capable of being policed in the meantime. The court is faced with the position (familiar, also, in other contexts) that whichever course it takes on an application which has to be decided without full argument may lead to irremediable prejudice to one side or the other. There is a balance to be struck.

The need to strike a balance between the prejudice to the defendant if he is required to disclose assets which it is later held he should not have been require to disclose and the prejudice to the claimant if the defendant is not required to disclose assets which it is later held he should have been required to disclose was recognised by this Court in the Motorola case. The decision in that case illustrates that there is no general rule that a party against whom a freezing order has been made is entitled to a stay of the disclosure obligations ancillary to that order until after it has been finally determined whether the freezing order should stand. Indeed, it provides support for the proposition that, in a normal case, a stay of the disclosure obligations is likely to be refused. But it is no authority for the proposition that a defendant will always be refused a stay of the obligation to make disclosure pending the final determination of his application to set aside the freezing order; no authority for the proposition that, notwithstanding that his application to set aside the freezing order is made before the time at which he has to make disclosure, the question whether or not the obligation to make disclosure should be stayed pending the final determination of that application need not be entertained by the court; and no authority for the proposition that, having made an application within time, he should not be heard on that application (or on the question of an interim stay) until he has first made the disclosure to which he objects. The procedural history in the Motorola case illustrates the extent to which the courts will seek to accommodate, as a matter of urgency, a hearing to decide the question whether or not disclosure should be made pending the final determination of the application to set aside the freezing order; so as to avoid a position in which a party who has not been heard is faced with the dilemma of complying with an order which he seeks to challenge (and suffering irremediable prejudice thereby) or risking contempt.

For those reasons I am in no doubt that Mr Justice Peter Smith was wrong to make the finding of contempt which he did make on 11 October 2002. The judge should not have made a finding of contempt without hearing what Mr van Hoogstraten had to say. Knowing that Mr van Hoogstraten wished to be heard on that day – and was prevented from attending court by some misunderstanding on the part of the prison service – he should have adjourned the hearing. If he had done so, he would have learnt that Mr van Hoogstraten had taken appropriate steps – and timeously – to set aside the order of 27 August 2002. He would then have been in a position to consider where the balance lay, in the particular circumstances of this case, between requiring disclosure before a final determination of the application to set aside the freezing order and staying the disclosure obligations until after final determination of that application. It may well be that he would have struck the balance in favour of immediate disclosure; but that is not to the point. The error lay in failing to take the step which would have led him to appreciate that there was a balance to be struck.

It follows that I would allow the appeals under references 2003/0537 and 2003/0580 in relation to the order of 11 October 2002 to the extent of setting aside the findings of contempt and paragraphs A1 – 3 and B5 in that order.

As I have said, the grounds upon which the judge relied in striking out Mr van Hoogstraten’s defence and counterclaim were (i) the continuing failure to comply with the disclosure obligations imposed by the order of 27 August 2002, in conjunction with the failure to comply with the associated unless order contained in paragraph 3 of the order of 13 November 2002 and (ii) conduct which had put the fairness of any trial in jeopardy – that is to say Mr van Hoogstraten’s part, as evidenced by his criminal conviction, in relation to the killing of Mr Mohammed Raja in July 1999.

The claimant accepts, I think, that in the events which have happened since December 2002 – and, in particular, the quashing of Mr van Hoogstraten’s criminal conviction and the decision that he should not face further criminal proceedings in relation to the killing of Mr Mohammed Raja - he cannot now rely on the second of those grounds. That, as it seems to me, must be correct. It is clear from paragraphs 107 and 109 of his judgment of 12 December 2002 (set out earlier in this judgment) that the judge based his conclusion that Mr van Hoogstraten was implicated in a plan to frighten or intimidate Mr Mohammed Raja – so as to deter him from proceeding with, or giving evidence at a trial of, these proceedings – from a reading of the summing up in the criminal trial and the direction to the jury on manslaughter and from the jury’s verdict. Now that the direction has been held to be flawed, and the conviction quashed, there is only the summing up to support that conclusion. But the judge in the criminal trial was not a judge of fact; and his summing up cannot, as it seems to me, be relied upon as evidence of fact in these proceedings. That is not, of course, to hold that the claimant cannot allege and prove facts in these proceedings which provide a foundation for an allegation of abuse of process. It is simply to hold that he cannot support the judge’s conclusion on the basis of the material on which the judge relied.

The question, therefore, is whether the judge was entitled to strike out the defence and counterclaim on the basis of a continuing failure to comply with the disclosure obligations imposed by the order of 27 August 2002 read with the unless order contained in paragraph 3 of the order of 13 November 2002. In my view the answer to that question is ‘No’.

I reach that conclusion for two reasons. First, there has remained, as it seems to me, real doubt as to what it was that Mr van Hoogstraten was required to do in order to comply with the disclosure obligations imposed by paragraphs 9(a) and 10 of the order of 27 August 2002. I have identified the points earlier in this judgment: they are (i) whether the extended meaning given to the expression “the Respondent’s assets” by paragraph 6 of the order of 27 August 2002 should be confined to the restraint imposed by paragraph 5 or should be taken to enlarge the meaning of the expression “all of his assets . . . whether in his own name or not and whether solely or jointly owned” in paragraph 9(a) and (ii) whether, if that extended meaning was intended to have effect in the context of the obligation to disclose information, Mr van Hoogstraten was required to identify all those persons and bodies who (although they could not be compelled to do so) might be expected to deal with their assets in accordance with his wishes and the assets within the compass of that expectation. The judge assumed the first point against Mr van Hoogstraten without really addressing the problem. He did not address the second point at all. That approach provides no firm foundation for findings of continued contempt; or for an unless order.

The second reason is that, even if it were clear what Mr van Hoogstraten had to do in order to comply with the disclosure obligations, striking out his defence and counterclaim was not an appropriate response to his failure to make adequate disclosure. It must be kept in mind that the disclosure which Mr van Hoogstraten was required to make was not disclosure in the action; in the sense that it was necessary in order that there be a fair trial of the issues in the action. It was disclosure in aid of a freezing order made in anticipation of the claimant’s success in the action. In that context the observations of Mr Justice Millett in Logicrose Ltd v Southend United Football Club Ltd (The Times, March 5 1988), cited and applied in this Court in Arrow Nominees Inc and another v Blackledge and others [2001] BCC 591 and by Sir Andrew Morritt, Vice-Chancellor, in Douglas v Hello! Ltd (No 3) [2003] EWHC 55 (Ch), [2003] EMLR 29, are directly in point. Mr Justice Millett said this;

There was, in the present case no risk that the failure to make disclosure in aid of the freezing order would put in jeopardy the fairness of a trial of the issues in the action. The most that could be said was that failure to make disclosure in aid of the freezing order might lead to a position where the claimant’s success in the action would be rendered nugatory by the dissipation of assets which ought to have remained available to meet any judgment which he obtained. In that sense it might, perhaps, be said that inability adequately to police the freezing order “would render further conduct of the proceedings unsatisfactory”. But that, of course, is founded on the premise that the freezing order, made without notice to Mr van Hoogstraten and on which he had never been heard, was to stand. And, by refusing to hear and determine the application to set that order aside, the judge could not safely proceed on that basis.

For those reasons I would allow the appeal under reference 2003/0537 in so far as it relates to the order of 12 December 2002. Paragraphs 1 – 12 of that order should be set aside.

I would allow the appeals under references 2003/0537, 0579 and 0580. I would set aside paragraphs 3 and 4 of the order of 10 September 2002; the findings of contempt and paragraphs A1 – 3 and B5 in the order of 11 October 2002; the costs order of 24 October 2002; and paragraphs 1-12 of the order of 12 December 2002. I would set aside, also, the writ of sequestration and remit to a judge of the Chancery Division the question upon what terms the sequestrators should be discharged.

Subject to any further submissions which the parties may wish to make, I would make no order on the appeal under reference 2003/0581.

I would make no order in the appeal under reference 2003/0538, save to remit to a judge who is to determine the terms on which the sequestrators should be discharged any remaining questions arising on the order of 10 February 2003.

I would make no order in the appeal under reference 2003/1704.

I agree.

I also agree.