Lord Justice Chadwick :
- 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.
Events leading to the freezing order made on 27 August 2002
- 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:
"1A Mr Raja was murdered on 2nd July 1999 by two accomplices of the First Defendant. Those accomplices acted on the First Defendant's instructions for the purpose and/or with the intention of either killing Mr Raja or at the very least causing him very serious harm and/or intimidating him through a threat of serious violence. The aim and/or intent was to prevent or discourage him from giving evidence in this action and/or continuing this action.
1B The Claimant will refer to and rely upon the conviction at the Central Criminal Court on 19th July 2002 of the First Defendant's two accomplices of the murder of Mr Raja and of the First Defendant himself on the 22nd July 2002 of the manslaughter of Mr Raja.
1C The remainder of this pleading is without prejudice to the Claimant's contention that by reason of the above the First Defendant is guilty of abuse of process and/or perverting the course of justice by:
(a) seeking to prevent or discourage Mr Raja pursuing this claim and/or
(b) causing the death of Mr Raja and depriving the Claimant of the opportunity of (sic) properly prepare for and present the claim at trial
(c) putting the fairness of the trial in jeopardy by preventing or discouraging Mr Raja giving evidence and/or
(d) seeking to obstruct the just disposal of the proceedings and/or
(e) considerably increasing the cost of pursuing complex litigation without the benefit of Mr Raja's (sic) and/or placing a disproportionate and prejudicial financial burden on the Claimant's Estate
(f) in all the circumstances rendering further conduct of the defence unsatisfactory and/or
(g) in all circumstances (sic) seeking to prevent the Court doing justice
so that under the inherent of the Court and/or as a matter of public policy and/or in accordance with CPR part 3.4(b), the First Defendant's Defence and Counterclaim should be struck out and judgment on liability and for an assessment of damages and/or all necessary accounts inquiries (sic) should be given against the First Defendant and/or the First Defendant should be disallowed in any event from taking any further part in the proceedings."
The application to strike out was to be heard by Mr Justice Peter Smith in November 2002.
- 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:
"319. Furthermore because of the manner in which Mr Hoogstraten structures his affairs, and in particular the use of aliases and the apparent admission that he controls a number of limited companies incorporated in foreign jurisdictions, the Claimants (sic) believe the Defendant has 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.
320. Added to these concerns are the fact that Mr van Hoogstraten is clearly someone who cannot be trusted. He has been accused of dishonesty within the action i.e. he has been accused of conspiracy and/or fraud. He has been accused of fraud in at least one other action (Michael Kennedy v Hoogstraten and Janson's). He is known to have lied concerning his relationship with Mr Raja and in particular his responsibility for Mr Raja's death. He has previous convictions for dishonesty outside of the allegations made in this action. He has had his assets sequestrated due to unpaid tax, has been held in contempt of court twice and almost jailed for breaching an earlier mareva. A number of his companies appear to have been involved in past incidents of debt default.
321. In all the circumstances the Claimants submit that it is more than reasonable to grant a Freezing Order over all known assets pending a return date and a proper assessment of Mr van Hoogstraten's financial position. Thereafter the Claimants submit that the Freezing Order should be imposed over sufficient assets to meet a potential Judgment of £5m."
- 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 freezing order made on 27 August 2002
- 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 5 applies to all the Respondent's assets whether or not they are in his own name and whether they are solely or jointly owned. For the purpose of this order the Respondent's assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions."
- 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:
"9. (a) Unless paragraph 9(b) applies, the Respondent must within 1 week of service of this order and to the best of his ability inform the Applicant's solicitors of all his assets worldwide exceeding £10,000 in value whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets.
(b) If the provision of any of this information is likely to incriminate the Respondent, he may be entitled to refuse to provide it, but is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the respondent liable to be imprisoned, fined or have his assets seized.
10 . Within 14 days after being served with this order, the Respondent must swear and serve on the Applicant's solicitors an affidavit setting out the above information."
- 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  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:
"The applicant will serve this order on the Respondent (by leaving the same with the Governor of HM Prison Belmarsh for onward delivery to the Respondent) as soon as practicable together with:
(i) copies of the affidavits and exhibits containing the evidence relied upon by the Applicant, and any other documents provided to the court on the making of the application;
(iii) (sic) an application notice for the continuation of the order." [emphasis added]
The words which I have emphasised do not, of course, appear in the model form. They were added following discussion between counsel for the claimant and the judge at the hearing on 27 August 2002 see pages 20 to 22 of the transcript of proceedings on that day. It is, I think, clear from the transcript that the judge did not intend to make an order for substituted service.
Service of the order of 27 August 2002
- 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:
"On 4th September I received a call from Sandra of the Governor's office at HM Prison Belmarsh querying what the Governor's office were to do with the order. I advised her that it was to be served on Mr Van Hoogstraten and advised her that Mr Watt had told my colleague Mr Pabla that this would be done on the 29th August. She advised me that she would make sure that the order and the documents had been passed on to Mr Hoogstraten."
The telephone conversation referred to in that paragraph was followed up by a letter dated 5 (or 6) September 2002 from Mr Lightfoot to the governor. After referring to the delivery of documents to the prison on 29 August 2002 and to the telephone conversation on 4 September 2002, he wrote:
"We would be extremely grateful if you would contact us by return to confirm:
1. The documents were received and
2. That they were passed to Mr Van Hoogstraten.
3. The date and time of when they were passed to Mr Van Hoogstraten.
The Freezing Order requires Mr Van Hoogstraten to provide information as to the whereabouts of his assets. That information was due to be provided within 7 days of service of the Order.
Furthermore Mr Van Hoogstraten is obliged under the Order to swear and file an Affidavit confirming his financial position. That Affidavit has to be sworn and filed at the Court within 14 days of service of the Order.
To date he has done neither.
We are concerned that the reason that Mr Van Hoogstraten has not complied with the Order is because he may not have seen it. It is therefore imperative that we clarify when, or if, he has seen the freezing order and the supportive documentation."
There is nothing in the affidavit of 1 October 2002 or elsewhere in the evidence which suggests that the information sought in that letter was ever provided by the governor or by the prison service.
- 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:
"Upon receipt of the freezing order of 27th August I consulted with my Solicitor Mr David Englehart who was already pre-booked to see me on 30th August as I was unable to contact my solicitor Mr Marios Minaides who was on record in the action.
Prior to his meeting with me, Mr Englehart had discussed the freezing order and taking instructions in respect thereof with Mr Minaides. . . ."
For completeness I should mention that the claimant's solicitors had sent a copy of the order with copies of the supporting documentation to Mr Minaides' firm, Minaides Robson, under cover of a letter dated 30 August 2002.
The renewal of the freezing order on 10 September 2002
- 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 final variation to the draft Order was an Order for Substituted Service of the Order on the Governor of HM Prison Belmarsh rather than service on the Respondent personally. It was explained to the Court that access to a category A prisoner by the Claimant's solicitors would require special clearance through the Governor's office and this was likely to take some time. This was likely to delay service of the Order. Furthermore the Respondent could simply refuse a visit by the Claimant's solicitors and refuse to accept service. It was submitted that Substituted Service via the Governors office would be effective, the documentation would be passed on to the Respondent and he would become fully aware of the Order. This was likely to take far less time and be less uncertain than arranging for personal service by the Claimant's solicitors or their agents. Mr Justice Rimer accepted this submission and agreed an Order for Substituted Service."
With the benefit of the transcript of the proceedings before Mr Justice Rimer it can be seen that the claimant, through counsel, had asked for an order for substituted service. It can also be seen, from the transcript as well as from the order itself, that the judge did not make such an 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:
"Mr Englehart advised me [at the meeting on 30 August 2002] that at such short notice Mr Minaides could not possibly deal with the matter, more especially so due to the fact that he was on holiday abroad from 3rd to 9th September inclusive. . . .
As I could see that there was a return date of 10th September I decided to dismiss Mr Minaides as my Solicitor and represent myself in what I regarded and still regard as a simple matter that of the freezing order
I did not, at that stage, consider or appreciate that my dismissal of Mr Minaides would also extend to the main action which is considerably more complicated."
- 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:
". . . I made arrangements by application to the I.D.O. clerk to be brought to Court on 10th September and the details of this are set out in my letter of 10th September to Room TM505 following on from the failure that day of the prison to produce me at Court".
His letter of 10 September 2002, which was received by the court on 17 September 2002, contains the following paragraphs:
"Last week I made arrangements to be presented at Court this morning but when the Senior Officer here telephoned your office this morning, and spoke to a Mr Bell, he was told that I was 'not required' as the hearing was ex parte.
I am not at all happy about this as I have not agreed to any further ex-parte hearing and I wish to oppose the interim order granted on 27 August.
This interim order has been obtained by deception on the part of Mr Lightfoot and I wish to cross-examine him on the contents of his First Affidavit. He has produced no credible evidence that would support such an interim order which cannot be based on press reports, lies and suppositions.
Furthermore, he has not provided me with his exhibit JAL 87 pages 16,17 and 18 or exhibit JAL 73 in its entirety."
For my part I would accept as probable that Mr van Hoogstraten had expected to be taken to court on 10 September 2002; that the prison authorities had made enquiry of the Chancery Listing Office on that morning and had been told that he did not need to attend (no doubt because the listing office had learnt from the claimant's solicitors that the hearing was not to be effective as they had agreed an adjournment with Mr di Stefano); and that, as a result, the prison authorities had cancelled the arrangements that Mr van Hoogstraten thought he had made.
- 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:
"We confirm that we will send when received a copy of the 10 September Order to Mr Van Hoogstraten under Rule 39 [of the Prison Rules] but confirm that it is merely a one-off arrangement and that we could not undertake or guarantee that we will forward or copy correspondence to him without his specific instructions. For the purpose of service of documents, this can only be effected directly upon Mr Van Hoogstraten through the Prison at Belmarsh although you may wish to copy us in case Mr Van Hoogstraten wishes to discuss any matters on one of the Writer's regular visits to the Prison . . ."
Mr van Hoogstraten's application to set aside the freezing order
- 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:
" . . . [the judge] has asked me to advise you that, should you wish to challenge the original order and/or its extension, you will need to make a formal application on notice to the Claimant's solicitors. For this purpose I enclose the required form for your use, which should be returned to the Chancery Listing Office in Room WG4 at the Royal Courts of Justice, together with the appropriate fee of £50."
That advice was, of course, correct. The proper way to challenge an order made without notice is not to appeal from the order: it is to apply, on notice, to set the order aside. An appeal (if any) is from a refusal to set the order aside.
- 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:
" . . . I applied on 10 September to oppose the interim order dated 27 August. That letter was acknowledged by the Clerk to Mr Justice Patten on 20th September and on 25 September I sent my formal application to the Court together with a cheque for the £50 fee) to set aside/vary the Order of 27th August and other matters. As at today I have had no response to that application."
The judge replied by a letter of 22 September 2002:
"I have investigated the question of your application further and can confirm that it has been received but has not yet been fully processed and returned to you. I can only apologise to you for that on behalf of the Court.. . . ."
There seems to be no doubt, therefore, that an application to set aside the order of 27 August 2002 was properly made; and was received by the court with the appropriate fee. There is no doubt, also, that that application has never been heard as appears from the subsequent events set out in this judgment. The application cannot now be found on the court's files. We were told by counsel for the claimant that, in response to inquiries of the Chancery Listing Office, the claimant's solicitors had been told that the application notice had been lost.
The application for committal
- 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:
"In view of the difficulties in personally serving court orders, which I have outlined in paragraph 6 of this affidavit, the order of 10th September 2001 (sic) was again served via the Governor's office of HM Prison Belmarsh. . . ."
Copies of the covering letters dated 11 September 2002 (to which I have referred earlier in this judgment) were exhibited to the affidavit. Mr Lightfoot went on to say this:
"Since that date I have heard nothing from Mr Hoogstraten in respect of the freezing order and specifically his obligations to provide the information required under paragraphs 9(a) and 10 of the order. He is however, in my belief, fully aware of the order and its provisions. That belief is based on a telephone call I had with a solicitor called David Englehart on 12th September 2002.
. . . During my conversation with Mr Englehart, it became clear that Mr Hoogstraten was aware of the freezing order and his obligations thereunder. In particular Mr Englehart told me that he had been in contact with 'Nick' and that he had tentatively suggested to Mr Hoogstraten that he might want to put up sufficient security to satisfy the sum of £5 million secured by the order. He told me that the suggestion 'went down like a lead balloon'."
- 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:
"I had made arrangements to be brought to Court for the hearing of 11th October and this was confirmed to me on 8th October by senior Officer Holt. On the morning of 11th October I reminded Officer Caller of the fact and he passed it to Officer Gladman. At just before 10 a.m. Officer Gladman came to tell me that he had checked with Healys Solicitors who told 'security' that I was not required at Court. . . ."
- 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:
"MR JUSTICE PETER SMITH: Have you any authority to be here?
MISS DORRELL: No I have no instructions, I have come out of courtesy to your Lordship to explain that he [Mr van Hoogstraten] is not here and it strikes [me] that, because he acts in person, your Lordship will want him here.
MR JUSTICE PETER SMITH: Not necessarily.
MISS DORRELL: What I understand has gone wrong . . .
MR JUSTICE PETER SMITH: You would for committals because normally sanction (inaudible) but that is not a sanction which is going to be applied if there is a contest to the case.
. . .
MR JUSTICE PETER SMITH: It is a simple enough issue. In August he was ordered to provide some information about his financial affairs by 10 September; he failed to do that. He was given further time; and he is in breach of a second order.
. . .
MR JUSTICE PETER SMITH: Only Mr Van Hoogstraten can answer the questions. He knows what he has to answer. It is very good of you to come, but I am not sure whether you can help me at all, really.
MISS DORRELL: No. (several inaudible words) phoned the prison this morning and they said that Mr Van Hoogstraten had requested to be produced. (inaudible) I think out of courtesy since they do not act, have faxed the prison and asked for his productions, and when Belmarsh telephoned this court yesterday afternoon, they were told he was not required. In other words he has asked to produce, and I think an administrative error has meant he is not here.
MR JUSTICE PETER SMITH: Who told him that? Have you any idea who told him that?
MISS DORRELL : I can telephone the prison . . . But these administrative errors do occur.
MR JUSTICE PETER SMITH: Yes, I know, because they lost all his papers at one time.
. . .
MR JUSTICE PETER SMITH: The claimant's solicitors left them with the governor and then they could not find them.
MISS DORRELL: I see. There have been one or two difficulties but they have said, I understand, that they will bring him if your Lordship requires it, or they will bring him on another day.
MR JUSTICE PETER SMITH: Right. That is very helpful. Thank you very much indeed."
- 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:
"[Mr Van Hoogstraten] is in custody in HM Prison Belmarsh. He was made aware of the order. He has had other people corresponding with the claimant's solicitors informally on his behalf. He was aware that an extension of time for compliance was made to Mr Justice Patten on 10th September until 24th September. The only communication the claimants have had from him is the notification that he intends to act in person.
The claimants take the view that Mr Van Hoogstraten is simply carrying on a policy that he has exhibited in other cases of wilfully disobeying court orders. I agree. It seems to me that there is no reason why, if he wished either to challenge the order, or explain to the court why he was not in a position to comply within the time limits, he could not have done so.
The present application is served short, in that the rules require, ordinarily, an application like the present one to be served on 14 days' clear notice. I will abridge time for the hearing of the application and hear it today. Having seen the fourth affidavit of Mr Lightfoot and the exhibits, I am satisfied that Mr Van Hoogstraten is in breach of Mr Justice Rimer's order as varied by Mr Justice Patten on 10th September. He is accordingly, in my view, in contempt of court and I so find."
- 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:
". . . If the fine has not been paid by that date then it will become operative.
I also intend to encourage Mr Van Hoogstraten to comply with the order by directing and ordering that as long as he fails to comply with Mr Justice Rimer's order, he will be fined £220,000 the next week, that is to say 15th November and the same amount every week, increased by 10% from the previous week's amount until he complies with the order. The 28 days suspension will give Mr Van Hoogstraten an opportunity to apply to the court and make such representations as are appropriate in his mind."
- 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.
The order of 24 October 2002
- 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:
"It is an outrageous situation that I am being denied my legal right to defend this action.
I believe that the way I am being treated is also in breach of article 6 of the HRA 1998 because, although that section appears to relate to criminal proceedings, in this matter, I see that a penal order has been endorsed on those orders of 10 September and 11 October.
Also, this case is getting shifted around from one judge to another and no one, it seems, knows what is the true position to my detriment.
Surely it is not beyond the power of a High Court Judge to Order my production at Court so that this nonsense can be properly addressed."
- 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:
"1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(a) . . . ;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing . . . ;
(d) to examine or have examined witnesses against him . . . ;
(e) . . . "
It was accepted on behalf of the claimant on this appeal although after some hesitation that the whole of article 6 is engaged in relation to committal proceedings that is to say, that committal proceedings are of a criminal nature. In my view, an argument to the contrary could not have been sustained.
- The judge, himself, replied to Mr van Hoogstraten's letter. On 22 October 2002 he wrote:
"I was of course, as you well know concerned with the failure to comply with the Orders. Whether or not you have applied to discharge the Orders they have to be complied with. Mr Justice Patten had extended time and that had expired. Apparently Healeys had received nothing from you save a notification that you were now acting in person.
I cannot comment on what you say Healeys have alleged to have said. If that is a matter that you wish to raise you should do so.
Equally if you wish to challenge my Order made in your absence you should do so. However, until the Order is set aside or varied it too remains in force.
. . .
I have investigated the question of your application further and can confirm that it has been received but has not yet been fully processed and returned to you . . . . However even if it had been processed it would still have been necessary for you to comply with the Orders.
I have also investigated my powers. I have made arrangements for you to be produced as soon as possible from HMP Belmarsh so that I can consider the matter further."
In a post script to that letter the judge noted that a hearing had been arranged for 24 October 2002.
- 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:
"I did not receive the letter dated 22nd October from Mr Justice Peter Smith until 26th October when I immediately responded . . . due to the fact that I was prevented from attending Court on the 24th October due to the fact that no appropriate security van was available. The full details of the incident are set out in my letter dated 26th October."
It is not, I think, necessary to extend this judgment with details of the reasons why Mr van Hoogstraten was unwilling to travel to court in the vehicle provided by the prison service. It is accepted that it was not unreasonable for him to refuse to do so. The judge, himself, was subsequently willing to accept that Mr van Hoogstraten "had a reasonable explanation for not attending on 24 October 2002" see paragraph 15 of his judgment of 12 December 2002.
- 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:
"Having asked me to make an order for your production at Court it is unfortunate that you chose not to attend the Court hearing set up for your benefit.
This has resulted in a waste of time and I determined that it was right that you should pay these wasted costs on an indemnity basis . . .
I am writing to tell you what I would have said if you had attended. The position is that you are in breach of the Costs Order, which led to my imposition of the fines and continue to be in breach. I regard this as serious. You have not explained why you have not complied with the Orders despite the first one having been made nearly 2 months ago.
In these circumstances I am not prepared to entertain any application to discharge the Orders until you comply with the Order of Mr Justice Rimer as extended by the Order of Mr Justice Patten. Further the fines will similarly continue.
If you wish to make representations as to whether it is correct for me to refuse to entertain your application you are of course at liberty to do so. In that eventuality I will make arrangements for you to be brought to Court again."
The reference, in the third paragraph of that letter, to Mr van Hoogstraten being "in breach of the Costs order" is difficult to understand. The judge must, I think, have intended to refer to the breach of the orders of 27 August and 10 September 2002 which he had found established on 11 October 2002. The references to "any application to discharge the Orders" and to "your application" must be to the application of 25 September 2002 which remained not "fully processed".
- 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.
The hearing on 31 October 2002
- 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:
"MR VAN HOOGSTRATEN: I made an application and I am wondering what has happened to it.
MR JUSTICE PETER SMITH: The application in September?
MR VAN HOOGSTRATEN: Yes, My Lord.
MR JUSTICE PETER SMITH: That was an application to set aside Mr Justice Rimer's order, which as I explained to you in my letter to you, the courts appear to have lost at the moment or it is going through the system. I appreciate that is not satisfactory from your point of view but, as I said to you in my letter, I am not going to entertain that application until you comply with the order.
MR VAN HOOGSTRATEN: Is that not putting the cart before the horse?
MR JUSTICE PETER SMITH: No it is not. Because the authorities are that I am of a discretion whether or not I am going to entertain somebody who is in breach of an order. Now, as I said to you in my letter, if you want to challenge that decision which I made last week and communicated to you, then you must set out in evidence why I should not require you to comply before I entertain the application."
- 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  EWCA Civ 989,  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:
"I wish to cross examine Mr Lightfoot, Mr A S Raja and Mr A J Browne in relation to their lies mentioned or referred to in the first affidavit of James Lightfoot sworn 22nd August 2002 in order to support my application.
I wish to adduce evidence from members of my criminal legal team to support the advice they gave me in early September concerning this matter and prejudice."
The second of those paragraphs is plainly directed to paragraph 9(b) of the order of 27 August 2002 which had been included in the order for the purpose of protecting Mr van Hoogstraten's privilege against self-incrimination. There was annexed to the application notice a statement of the matters on which Mr van Hoogstraten wished to rely. These included the assertions that:
"4. I have never, at any stage in my life, failed to honour any personal or financial obligation. . . .
5. At no stage since April of this year have I or any of 'my' companies taken any steps to dissipate, transfer or deal in any way with assets nor is there any intention to do so."
Whether or not those assertions could be made good, they deserved consideration in the context of an application to discharge a freezing order made without notice.
The orders of 13, 20 and 27 November 2002
- 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:
"that . . .
(b) the First Defendant is in contempt of Court due to his continuing failure without lawful or reasonable excuse to comply with the Freezing Order dated 27th August as varied by the further order of 10th September 2002 and 11th October 2002 and/or
(c) The First Defendant is in contempt of Court due to the fact that it was admitted to the Court on the 13th November 2002 that the First Defendant has discharged legal costs and expenses without informing the Claimant where the money was to come from pursuant to paragraph 11(a) of the Freezing Order of 27th August 2002 and/or
(d) That the First Defendant is in contempt of Court due to his continuing failure to comply with the order for costs of 11th October 2002 and the costs order of 24 October 2002
(e) That the First Defendant remains in breach of paragraphs 7, 8, 10, 12 and 16 of the order of 04th July 2002"
On the same date, 15 November 2002, the claimant issued an application notice seeking permission to issue a writ of sequestration.
- 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:
"Mr Lightfoot's fifth affidavit sets out a whole series of assets which no longer feature in the compliance affidavit [of 15 November 2002]. It seems to me that Mr Van Hoogstraten should be given an early opportunity [to] answer if he can the various questions on assets that were raised. It might be that he accepts what was said in [Mr Lightfoot's] affidavit. I do not know. He might have an explanation as to why he said things about his wealth over the years and his real wealth now. He would not be the first person who exaggerated his wealth. It is really a matter for Mr Reza as to how he wants to go ahead. That is why I required Mr Van Hoogstraten to come hear today, not because there was ever going to be a long and detailed cross-examination, because that would take many days, and I made that clear at the last hearing, but so that he would have an opportunity to answer today any matters concerning his affidavit of means, which seems to me a very important part of the application to strike out, because it does seem to me that if Mr Van Hoogstraten has not been properly frank in relation to his affidavit of means, it makes matters even more complicated for him. That was what I was proposing to do, Mr Reza."
In the event the judge was persuaded that it would not be fair to expect Mr van Hoogstraten to give evidence on 27 November 2002 because he had not had a proper opportunity to consider Mr Lightfoot's fifth affidavit and so the matter was adjourned until the second week in December.
The order of 12 December 2002
- 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 cumulative total as at 12th December 2002 of the fines imposed on the First Defendant for his contempt of court pursuant to the Order dated 11 October 2002 shall be varied to an all inclusive sum of £100,000. Thereafter until the First Defendant has purged his contempt for the continued failure to comply with the disclosure obligations in the Order dated 27th August 2002 a revised weekly fine of £50,000 shall apply."
But for that paragraph the aggregate of the fines imposed by the order of 11 October 2002, as at 12 December 2002, would have been in excess of £1.2 million, rising by approximately £300,000 per week.
The judge's reasons
- 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:
(1) At paragraphs 17 to 27 the judge considered the extent of the disclosure obligations imposed by the order of 27 August 2002; and, in particular, the effect of paragraph 6 of that order which contains the extended definition of "the Respondent's assets". It is clear that the judge regarded it as beyond argument that paragraph 6 coloured the meaning of "all his assets worldwide" in paragraph 9 as well as the meaning of "his assets" in paragraph 5. It may well be that the contrary was not suggested to him. At paragraph 20 of his judgment he recorded that Mr van Hoogstraten had told him that he had not appreciated that the disclosure obligation required him "to provide full details of all of the assets in respect of the disputed properties and businesses"; and expressed disbelief at that suggestion. At paragraph 24 he said this:
"24. Thus Mr Van Hoogstraten was by virtue of the extended definition given to the meaning of the words Respondents assets obliged to provide details of all of the assets of the various entities and businesses extending to those which he disputed he was the beneficial owner of."
The judge gave Tombstone Limited, a company listed in schedule E to the order of 27 August 2002, as an example of an entity or business, details of the assets of which ought to have been disclosed by Mr van Hoogstraten. He said this, at paragraph 26:
"26. . . . The conclusion I draw . . . is that he ultimately is the beneficial owner of Tombstone Ltd. Now of course Mr van Hoogstraten disputes that but that is not a basis for refusing or not providing the information required by the Freezing Order."
(2) At paragraphs 28 to 40 the judge considered whether the orders of 27 August and 10 September 2002 had been properly served on Mr van Hoogstraten. It is clear that he took the view that both orders authorised substituted service under CPR 6.8. At paragraph 28 he referred to the undertaking in paragraph (3) of schedule B to the order of 27 August 2002. At paragraph 34 he observed that it was "self evident that the undertaking given in schedule B to the Freezing Order as regards service" applied to service of the order of 10 September 2002, also notwithstanding that (as the judge recognised) the later order contained no express provision as to service. At paragraph 35 he said this:
"35. . . . In this context it seems to me Mr Justice Rimer was applying CPR 6.8 and providing an alternative [method] of service. That seems to me to be obvious as there would be no method of serving Mr Van Hoogstraten personally. I reject Mr Reza's submission that sending the documents to the Governor and asking him to give them to Mr Van Hoogstraten is personal service for the purpose of CPR 6.4."
As the judge recognised (at paragraph 37 of his judgment) the significance of the point lay in the requirements of RSC Order 45 rule 7 which required personal service of the order as a condition precedent to enforcement by committal proceedings.
(3) At paragraphs 41 to 49 the judge addressed the question whether it was open to him to make a finding of contempt on 11 October 2002, at a time when Mr van Hoogstraten had made an application to discharge the order of 27 August 2002 which had not been heard. At paragraph 42 he rejected a submission that he should not have continued the freezing order in the absence of Mr van Hoogstraten. He said this:
"42. . . . The Freezing Order was continued by me [on 11 October 2002] until trial or further Order to obviate any further unnecessary applications to Court arising out of a fixed return date. That does not cause Mr Van Hoogstraten any difficulty because he can always apply to vary or discharge the Order on making the appropriate application. I was not aware of course of the application that he sent to the Court because its existence was not on the Court file as it was still being processed. As regards the Freezing Order whether or not Mr Van Hoogstraten was there would have made no difference whatever he might have said. The Freezing Order would have continued if only to fix a date for hearing his application to discharge which would take a considerable time as he had indicated in his letter of 10 September 2002 that he wished to cross-examine Mr Lightfoot on his extensive affidavit. I doubt whether the Court would have acceded to that but nevertheless, responding to that affidavit would take some considerable time. In the meantime of course, it is equally the case that I cannot conceive of any Court would have suspended the operation of the compliance obligations in paragraphs 9 and 10. So Mr Van Hoogstraten's absence did not affect the decision as regards the Freezing Order"
At paragraphs 45 and 46 he explained why he had proceeded, on 11 October 2002, to make a finding of contempt in the absence of Mr van Hoogstraten, abridging time for that purpose:
"45. Mr Reza complains that the Order was issued with a return date of 11 October 2002 and was served on 5 October 2002 when the documents were handed to him. Messrs Healys letter wrongly tell[s] the Governor that documents have to be served before 8 October 2002. I suspect this is an erroneous assumption on the part of Mr Lightfoot that the application needed only to be served with two clear days notice. It is clear that under PD 52.4.4 the hearing date should be not less than 14 days after service of the claim form. That did not take place. Mr Reza dealing with the preamble "unless the Court otherwise orders" submits that the applicants must obtain an abridgement of time before the application is issued. I do not accept that. It seem[s] to me that that provision enables the Court to direct a hearing date to be at a shorter period if it operates under that provision. I do not see why that cannot be made retrospectively. Whether or not the Court would do that and thus abridge time under CPR 3.1(2) (a) or (b) is a matter for the Court to consider on each occasion. In the case of an application for enforcement of committal a Court will consider quite seriously whether a Defendant will suffer a disadvantage by a shortening of time. The Court must consider whether or not that is the appropriate case. Although the Claimants in Mr Irvin's skeleton argument sought permission to serve short that is not the correct way to approach it and I did not so consider it. I made an Order abridging time. It is true that that is not reflected in the Order but Healys note accurately shows I intended to make such an Order and did so.
46. Mr Reza also submitted that all that could be done was to fix a date for a hearing of the committal application in the future. I do not agree. PD52.4 .4 provides for the application to be proceeded with immediately if it is ready to be heard. That does not mean to my mind that the Respondent has to be there. In this context one has to bear in mind a number of factors. First, Mr Van Hoogstraten was already in prison having been found guilty. It was never suggested that prison was a sensible or appropriate sanction and I did not consider that to be the case. Second, the breach was relatively straightforward. He was ordered to provide details of assets verified with an affidavit and he had not complied. He had not communicated with the Claimants solicitors in the intervening period (and his later evidence shows that this was deliberately done by him). He was therefore plainly in breach of the Order and had had a considerable time to comply. Accordingly it was appropriate in my opinion (and I remain of that opinion) to abridge time to enable the application to be disposed of that day, hear the evidence and in finding him in breach of the Order apply the appropriate sanctions. That is precisely what happened. There is to my mind no procedural irregularity correctly identified by Mr Reza."
And, at paragraph 47, he explained why (although he was unaware on 11 October 2002 that Mr van Hoogstraten had made an application to discharge the order of 27 August 2002) the fact that that application was outstanding at the time made no difference:
"47. Mr Van Hoogstraten . . . [was] well aware of what the Order [of 27 August 2002] said and the time of it. He had made a decision not to comply with it. That is what his later evidence to which I shall make reference below clearly shows. Had he come on the 11 October he would not have said anything other than he was not going to comply because he had applied to set aside the Freezing Order. . . . the fact that he had sent the application for setting aside does not obviate the need to comply see Motorola v- Uzan  EWCA CIV 989. It seems to me that whilst matters have to be proceeded with carefully to ensure that no injustice is done to a Respondent to an application there was not injustice in this case. . . ."
- 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:
"76. He [Mr Lightfoot] made the point (with which I agree) that the Freezing Order by virtue of the definition of Respondents assets required Mr Van Hoogstraten to deal with more than his own personal assets. For that reason alone as I have already said the affidavits and information do not comply."
- 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:
"77. It is not appropriate at this stage to attempt to deal with the many matters, which Mr Lightfoot raises in his affidavit. There are however a number of clear matters which notwithstanding a further affidavit of Mr Van Hoogstraten to which I shall make reference below lead me to the conclusion that Mr Van Hoogstraten has assets which he has not disclosed in the two affidavits. I am satisfied beyond reasonable doubt that that is the position.
. . .
79. I am satisfied that Mr Van Hoogstraten has wilfully concealed his interest in significant other assets."
- 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:
"97. My conclusion is that Mr Van Hoogstraten has only told the truth when it was necessary for him to do so and that was when he was on trial for murder. His evidence there corroborates what Mr Lightfoot has said in his first affidavit. Mr Van Hoogstraten now chooses to be portrayed as a man of considerably less worth because it suits him to do so. I reject his affidavit evidence. To my mind it is completely untrue and incredible.
. . .
99. I am not in a position to determine fully what his assets are and that is not the point of the exercise in any event. I am satisfied to the standards that I have set out above that his affidavits are not true affidavits and that he has failed to comply with the Freezing Order as extended by the 10 September 2002. I am satisfied therefore that he was also in contempt on the 11 October 2002 and that he has failed to purge that contempt because his affidavits are not true."
- 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:
"100. This breach is a serious and continuing breach. It has now gone on since the Freezing Order was made on 27 August 2002. Mr Van Hoogstraten has put up a whole series of reasons as to why he initially should not comply and his purported compliance is a charade. Such conduct to my mind shows that he is plainly holding the Court in contempt and abusing its processes. For that reason alone that is sufficient justification for him to be debarred from defending and prosecuting his Counterclaim further and I accept the Claimants submission that he is and remains in contempt of Court.
101. It also means that he is in breach of paragraph 3 of my order of 13 November 2002 which provided that if he did not serve the affidavits in compliance his Defence and Counterclaim should be struck out and the Claimants would be entitled to such relief as is appropriate."
- The judge then considered the further ground relied on in the application notice of 8 August 2002:
"102. That is not the sole matter however. The Claimants initial application was based on Mr Van Hoogstraten's conviction for manslaughter. The application is based upon a series of authorities starting with Arrows Nominees Inc. v- Blackledge  2 BCLC 167, Hamilton v- Al Fayed The Independent 21 December 2000 and Terry v- Hoyer  EWCA Civ 678.
103. The Claimants submit the conduct of Mr Van Hoogstraten has caused severe injustice as it has deprived the Claimant of the opportunity of properly preparing for and presenting the claim for trial, put the fairness of the trial in jeopardy by preventing or discouraging Mr Raja from giving evidence and has led to an obstruction of the just disposal of the proceedings with a considerable increase of the cost of pursuing complex litigation without the benefit of Mr Raja's evidence."
- 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:
"107. I have particularly read the direction in relation to manslaughter. . . . The conviction based on that direction can only take place on the basis that Mr Van Hoogstraten counselled the other defendants to frighten Mr Raja by threatening him with force assaulting him or kidnapping him or doing damage to his home but without any intent to order any serious bodily harm. It may be (and I am expressing no view about this) that Mr Van Hoogstraten can successfully challenge the conviction for manslaughter, but that is not the end of the matter to my mind. Even if Mr Raja had not been killed if the connection between Mr Van Hoogstraten and the other defendants is established merely to frighten him that is a sufficient abuse of the process of the Court to my mind to disentitle a party from participating further in litigation. . . . If a party indulges in such act of intimidation he cannot expect in any civilised society simultaneously to reap the benefits of the other members of that society and be permitted to participate in litigation. He is abusing the processes.
. . .
109. I am quite satisfied having seen the transcript of the summing up that the only motivation was in relation to the dispute in this action with Mr Raja."
The judge held that for that reason, also, the claimant was entitled to succeed on the application to strike out.
- 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:
121. In addition, Mr Van Hoogstraten in my Judgment was in contempt and continues to be in contempt. The fines I imposed were considerable. In imposing large fines I hope[d] to "encourage" him to come clean. It was for that reason that the operation of the fines was suspended. None of this has worked. Accordingly the only way in which this can be addressed is to appoint a sequestrator over Mr Van Hoogstraten's assets so that his assets can be identified collected and realised for the purposes of paying fines, [and] any sums due to the Claimant's both as to damages and costs. I will appoint the sequestrator suggested by the Claimants.
122. The fines already total in excess of £1,000,000.00 (One Million Pounds) and a further sum in excess of £200,000.00 (Two Hundred Thousand Pounds) falls due by 4pm Friday 13 December 2002.
123. I accept Mr Reza's submission that the fines at that level are in danger of becoming disproportionate and oppressive. To my mind this is a serious contempt and normally would attract a sentence of imprisonment. Sentencing Mr Van Hoogstraten to a sentence of imprisonment will not achieve very much unless I make it consecutive to the current prison sentence that he is serving. It seems to me that a financial penalty is a matter, which ought to concentrate his mind more carefully. I will reduce the fines for the existing contempt as set out in my Order of 11 October 2002 to £100,000.00 (One Hundred Thousand Pounds). In addition I shall impose a weekly fine of £50,000.00 (Fifty Thousand Pounds) to commence on the 13 December 2002 until Mr Van Hoogstraten purges his contempt."
He indicated that a further reason "behind that Order" by which, I think, he meant the appointment of a sequestrator rather than the reduction of the escalating fines was his intention to make an order for a substantial interim payment on account of the claimant's damages and costs. He directed that the freezing order of 27 August 2002 should continue "as an aid to execution".
- 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:
"39. Mr Van Hoogstraten wrote to Mr Justice Patten as I have said and his Clerk replied on 20 September 2002. Mr Van Hoogstraten himself sent an application to the Court seeking to discharge the Freezing Order. Regrettably, the Court has mislaid that application although it is accepted that [it] was received as the cheque has been processed. Healys have received a copy of it. However, it has not been proceeded with because I have already determined Mr Van Hoogstraten is in contempt of Court in that he failed to comply with paragraphs 9 and 10 of the Freezing Order as extended by Mr Justice Patten and I indicated to him in my letter of 24 October 2002 that I was not prepared to entertain any applications to discharge the Orders until he complied with them. That remains the position. . . ."
The appointment of sequestrators
- 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 Court has expressly declared in paragraph 26 of the said judgement [of 12 December 2002] that the First Defendant is the beneficial owner of Tombstone Limited and its assets and accordingly for the purposes of this writ of Sequestration the assets held by Tombstone Limited are to be treated as part of the real and personal estate of the First Defendant". [emphasis added]
That, as it seems to me, is to read into paragraph 26 of the judgment a finding which is not expressed by the judge. What he said in that paragraph, so far as material in the present context, was this:
"26. Mr Van Hoogstraten self evidently as the sole director controls Tombstone Ltd. It seems to me the assets of Tombstone Ltd ought to have been dealt with in any compliance affidavit. He has failed to provide any [information as to] assets of Tombstone Ltd. Significantly, Tombstone Ltd apparently lent him £600,000 . . . in April 2002 to enable him to defend himself on the criminal charges and to prosecute the appeal against the conviction. That is a flagrant breach of Section 330 of the Companies Act 1985. . . . The conclusion I draw on the evidence before me is that Mr Van Hoogstraten controls Tombstone to such an extent that despite his apparent modest shareholding no other shareholder complained about the apparent removal of a sum in excess of £600,000. . . . The conclusion I draw from that absent any other explanation is that no one else complains because he ultimately is the beneficial owner of Tombstone Ltd. . . ."
That, clearly, is a finding that Mr van Hoogstraten is the beneficial owner of Tombstone Limited. But there is no express finding by the judge, in that paragraph, that Mr van Hoogstraten is the beneficial owner of the assets held in Tombstone's name that is to say, that Tombstone holds its assets as trustee for Mr van Hoogstraten. It may be that the judge intended to make such a finding; but, as it seems to me, he has not done so in terms. And, at the risk of stating the obvious, a finding that Mr van Hoogstraten is the beneficial owner of the company is a finding that he owns all the shares in the company; it is not a finding that he owns the assets of the company.
Applications in relation to the sequestration
- 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.
Should Mr van Hoogstraten be heard in this Court?
- 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  P 285, Astro Exito Navegacion SA v Southland Enterprise Co Ltd (The Messiniaki Tolmi)  2 Lloyd's Rep 595 and X Ltd v Morgan Grampian (Publishers) Ltd and others  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:
"From those speeches it is, I think, clear that it is wrong to take as a starting point the proposition that the court will not hear a party in contempt and then ask if the instant case falls within an exception to that general rule. It is preferable to ask whether, in the circumstances of an individual case, the interests of justice are best served by hearing a party in contempt or by refusing to do so, always bearing in mind the paramount importance which the court must attach to the prompt and unquestioning observance of court orders."
- 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:
(1) It is a striking feature of this case that the order of 27 August 2002 (as varied by the order of 10 September 2002), which imposed the obligations on which the finding of contempt was founded, and the order of 11 October 2002, by which the finding of contempt was established, were made at hearings at which Mr van Hoogstraten was neither present nor represented.
(2) Further, the order of 11 October 2002 was made at a time when (unknown to the judge who made it) Mr van Hoogstraten had sought, by an application properly and timeously made, to have the earlier orders set aside. Neither that application, made by notice dated 25 September 2002, nor Mr van Hoogstraten's subsequent application, by notice dated 15 November 2002, have yet been heard. The reason why those applications have not been heard is that the judge has held Mr van Hoogstraten to be in contempt of the very orders which (if the applications to set aside were to succeed) ought not to have been made.
(3) The effect has been that Mr van Hoogstraten has been found to be in contempt of court without having been heard and without having had a proper opportunity to be heard either on the question whether the obligations should have been imposed in the first place or on the question whether he was in contumaceous default in failing to comply with them.
(4) If these appeals were allowed to proceed, this Court would have the opportunity to determine whether, in the particular circumstances of this case, it was right that Mr van Hoogstraten should have been found to be in contempt of court without having had a proper opportunity to be heard on those questions. When giving permission to appeal on 13 June 2003 this Court was satisfied that the appeals had a real prospect of success. If this Court were to accede to the claimant's contention that Mr van Hoogstraten should not be heard on these appeals, it would be in danger of compounding what would (if there is, indeed, merit in the appeals) be a serious injustice and a breach of Mr van Hoogstraten's Convention rights.
(5) It is also striking that the orders of 27 August and 10 September 2002 were not made for the purpose of achieving a fair, just and efficient resolution of the issues in dispute in the action; nor (in contrast to the orders which had given rise to the contempt in AMF v Hashim (supra)) for the purpose of giving proper effect to a decision which had been made following the resolution of the issues in dispute in the action. The orders of 27 August and 10 September 2002 were made in anticipation of the result in the action. The purpose of those orders was to ensure that, if the claimant did eventually succeed at trial, he would not be deprived of the fruits of his success by the improper dissipation of Mr van Hoogstraten's assets in the meantime. But, if the order of 12 December 2002 stands, the issues in dispute in the action will not be resolved at a trial. Mr van Hoogstraten's disobedience to orders made in anticipation of the result in the action will have had the effect that those orders, themselves, have pre-empted the trial. Whether or not, in the particular circumstances of this case, that is the just result is a question which this Court would have the opportunity to consider and determine if these appeals were allowed to proceed. But, as it seemed to me, the interests of justice would not be served by this Court refusing to entertain that question on the ground that, in disobeying those orders, Mr van Hoogstraten has been found to be in contempt.
The issues for decision on these appeals
- 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.
The finding of contempt on 11 October 2002
- 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:
"It is a simple enough issue. In August he was ordered to provide some information about his financial affairs by 10 September; he failed to do that. He was given further time; and he is in breach of a second order."
The question, therefore, is not whether the judge was entitled to find that there had been a breach of the earlier orders: the question is whether he was wrong to make a finding of contempt without giving Mr van Hoogstraten an opportunity to be heard.
- The judge's answer to that question is found, first in the judgment which he delivered on 11 October 2002:
"The claimants take the view that Mr Van Hoogstraten is simply carrying on a policy that he has exhibited in other cases of wilfully disobeying court orders. I agree. It seems to me that there is no reason why, if he wished either to challenge the order, or explain to the court why he was not in a position to comply within the time limits, he could not have done so." [emphasis added].
The judge was wrong to think that Mr van Hoogstraten had not sought to challenge the earlier orders. He had sought to challenge those orders, by the application notice filed on 25 September 2002. The judge did not know that at the time. But that was not Mr van Hoogstraten's fault; it was the fault of the court office.
- 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:
". . . Mr Van Hoogstraten . . . can always apply to vary or discharge the Order [of 27 August 2002] on making the appropriate application. I was not aware of course of the application that he sent to the Court because its existence was not on the Court file as it was still being processed. As regards the Freezing Order whether or not Mr Van Hoogstraten was there would have made no difference whatever he might have said. The Freezing Order would have continued if only to fix a date for hearing his application to discharge . . . In the meantime of course, it is equally the case that I cannot conceive of any Court would have suspended the operation of the compliance obligations in paragraphs 9 and 10." [paragraph 42]
"Had he come on the 11 October he would not have said anything other than he was not going to comply because he had applied to set aside the Freezing Order. . . . the fact that he had sent the application for setting aside does not obviate the need to comply see Motorola v- Uzan  EWCA CIV 989. It seems to me that whilst matters have to be proceeded with carefully to ensure that no injustice is done to a Respondent to an application there was not injustice in this case. . . ." [paragraph 47]"
The thrust of that reasoning which may, perhaps, be seen as an attempt to justify what was done on 11 October 2002 ex post facto is that it was safe to make a finding of contempt on 11 October 2002 in the absence of Mr van Hoogstraten because there was nothing which he could have said on that day which would have led the judge to take any other course.
- 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:
(1) There was a failure to serve the order of 27 August 2002 on Mr van Hoogstraten personally, as required by RSC Order 45 rule 7. There was no order for substituted service; and, if there had been, it would have been necessary to specify, in that order, the date upon the order was to be deemed to have been served. Without that and absent personal service there was no date from which the time for compliance with the obligations in the order of 27 August 2002 began to run.
(2) Although that defect was cured by the subsequent order of 10 September 2002 which provided fixed dates by which the obligations were to be performed - it is plain that that order was made on the false basis that the time for compliance with the earlier order had already expired. And that order was made at a hearing at which Mr van Hoogstraten was not present, despite his request that he be produced. Further, that order contained no provision for substituted service; and there was no satisfactory evidence that that order (with its penal notice) was served personally on Mr van Hoogstraten although, plainly, he came to know of it.
(3) There was a failure to serve the application notice of 2 October 2002 no less than 14 days before the hearing on 11 October 2002, as required by paragraph 4.2 of the Practice Direction. The application notice was, in fact, served on Mr van Hoogstraten on 5 October 2002 (which was a Saturday). He had only four working days to respond to it before the hearing. Neither the application notice, nor the covering letter, indicated to Mr van Hoogstraten either what notice the rules required or that the judge would be asked to give permission to serve short. The judge decided to abridge time. He gave no reason for that decision in his judgment of 11 October 2002. In his judgment of 12 December 2002 he explained (at paragraph 46) that "the breach was relatively straightforward. . . . He [Mr van Hoogstraten] was . . . plainly in breach of the Order and had had a considerable time to comply." He went on, in a passage which I have already set out earlier in this judgment:
"Accordingly it was appropriate in my opinion (and I remain of that opinion) to abridge time to enable the application to be disposed of that day, hear the evidence and in finding him in breach of the Order apply the appropriate sanctions."
But, with respect to the judge, that is no answer to the point. The period of time allowed by the rules (14 days) is to enable the person charged with contempt to prepare his defence. The assumption underlying the rule is that the alleged contemnor will wish to prepare the arguments on which he wishes to rely in order either to assert that he has complied (not this case) or justify his failure to comply. In that context, the fact that Mr van Hoogstraten may have had ample time to comply with the disclosure obligations, if he intended to do so, is of little or no relevance.
- 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  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:
" . . . I am not prepared to entertain any application to discharge the Orders until you comply with the Order of Mr Justice Rimer as extended by the Order of Mr Justice Patten. . . ."
That approach was confirmed in the exchange between the judge and Mr van Hoogstraten at the hearing on 31 October 2002 to which I have already referred:
"MR JUSTICE PETER SMITH: . . . as I said to you in my letter, I am not going to entertain that application [to set aside the earlier orders] until you comply with the order [for disclosure].
MR VAN HOOGSTRATEN: Is that not putting the cart before the horse?
MR JUSTICE PETER SMITH: No it is not. Because the authorities are that I am of a discretion whether or not I am going to entertain somebody who is in breach of an order. . . ."
- 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  EWCA Civ 989,  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:
" Steyn LJ also recognised that undoubtedly there would be prejudice to the Sheikh in that case if he was forced to disclose his assets and ultimately managed to set aside the proceedings for want of jurisdiction, but Steyn LJ emphasised that that was not anywhere near as much prejudice as would be suffered if the claimant were unable to police the Mareva injunction for some time. The emphasis in that case, as has been the emphasis in this case by Mr Cran [leading counsel for the claimant], is that whereas at first sight it looks as though the court in dealing with suspending the supply of this information for only a short period of time, that is until the hearing of the summons to set aside the freezing order on 17 July, the reality is that that decision is likely to be appealed to the Court of Appeal, and indeed it may well go to the House of Lords. The reality is that if it were suspended now, it would be suspended for a very great period of time.
 In my view, in the light of the above citation from Steyn LJ the attack that David Steel J misdirected himself is unfounded. Furthermore, I do not think that this is a case in which we should interfere with the exercise of the discretion. The factors that weigh with me are these. First, although it is an invasion of privacy to force a party to disclose assets, a freezing order in normal circumstances simply cannot be effective without that disclosure. Once one has the situation which did exist in this case, which was that on 13 June it was accepted that the freezing order should continue, then prima facie David Steel J is right in saying that a disclosure provision would be the normal provision so that the freezing order can be properly policed and be effective.
 The second factor that weighs with me is that it may be that the defendants have an arguable case for setting aside the worldwide order, but Motorola clearly have a strong case that a fraud has been committed a strong case that dissipation is a serious risk. Furthermore the defendants have done nothing to comply with the United States order to replace the shares or their value. I for my part am quite unimpressed by the reasons for not replacing the shares. Furthermore, if the defendant wished to be free of this injunction he could have arranged for security to be given, but he has offered none. That security of course would be released if the injunction were set aside, but that simply has not happened."
Lord Woolf, Chief Justice, took the same view:
" When dealing with interim applications for stays a broad-brush approach has to be taken, otherwise on the application for a stay the court will be determining the very issues which are to be determined later. It seems to me that that was the approach of David Steel J. Adopting that approach, it seems to me that, although prejudice could be caused to the defendants in this case, the likelihood is that greater prejudice would be caused to the claimants if we were to interfere with the decision of David Steel J."
- 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.
The striking out of the defence and counterclaim
- 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  BCC 591 and by Sir Andrew Morritt, Vice-Chancellor, in Douglas v Hello! Ltd (No 3)  EWHC 55 (Ch),  EMLR 29, are directly in point. Mr Justice Millett said this;
"I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render further conduct of the proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice."
- 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.
Summary of conclusions
- 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.
Lord Justice May:
- I agree.
Lord Justice Pill:
- I also agree.