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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Raja v Van Hoogstraten & Anor [2004] EWCA Civ 968 (21 July 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/968.html Cite as: [2004] 4 All ER 793, [2004] EWCA Civ 968 |
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A3/2003/0579,0580 and 0581 A3/2003/1704 |
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE PETER SMITH)
A3/2003/1704 Royal Courts of Justice Strand, London, WC2A 2LL |
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B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE CHADWICK
and
THE RIGHT HONOURABLE LORD JUSTICE MAY
____________________
| ASGAR SABIR RAJA (representing the estate of the late Mohammed Sabir Raja) |
Claimant |
|
| - and - |
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| NICHOLAS VAN HOOGSTRATEN -and- TOMBSTONE LIMITED |
Defendant Proposed intervenor |
____________________
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
____________________
Crown Copyright ©
Lord Justice Chadwick :
Events leading to the freezing order made on 27 August 2002
"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.
"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 freezing order made on 27 August 2002
"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."
"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."
"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 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.
"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 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.
"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."
". . . 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.
"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
" . . . [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.
" . . . 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
"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'."
"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. . . ."
"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."
"[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."
". . . 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 24 October 2002
"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."
"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.
"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.
"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.
"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".
The hearing on 31 October 2002
"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."
"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
"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.
"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 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
(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 [2002] 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. . . ."
"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."
"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."
"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."
"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."
"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 [2000] 2 BCLC 167, Hamilton v- Al Fayed The Independent 21 December 2000 and Terry v- Hoyer [2001] 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."
"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.
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".
"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 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
These appeals
Should Mr van Hoogstraten be heard in this Court?
"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."
(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 finding of contempt on 11 October 2002
"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 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.
". . . 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 [2002] 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.
(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 a