GFH Capital Ltd v David Laurence Haigh
| Jurisdiction | England & Wales |
| Judge | Mr Justice Males |
| Judgment Date | 13 August 2014 |
| Neutral Citation | [2014] EWHC 3157 (Comm) |
| Docket Number | Case No: 2014/956 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 August 2014 |
[2014] EWHC 3157 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Rolls Building
7 Rolls Buildings
Fetter Lane
London
EC4A 1NL
Mr Justice Males
Case No: 2014/956
Mr Andrew Bonar (instructed by U/K) appeared on behalf of the Claimant
Mr Robert Lawson QC and Emily Mccrea-Theaker (instructed by Stephenson Harwood LLP) appeared on behalf of the Defendant
Approved Judgment
There are two applications before the court by GFH Capital Limited, a company registered in the Dubai International Financial Centre, in proceedings here against the defendant, Mr David Haigh.
The proceedings are under s.25 of the Civil Judgments and Jurisdiction Act 1982 in support of proceedings in the DIFC. In the DIFC proceedings, the substantive claim which the claimant is bringing is concerned with an alleged invoice fraud said to have been perpetrated by Mr Haigh. In support of that claim the claimant has obtained a worldwide freezing order from the DIFC, granted initially on an interim basis and then confirmed by Sir John Chadwick, the Deputy President of the DIFC Court. The s.25 proceedings here are for an English injunction to reinforce the worldwide freezing order obtained in the DIFC.
The first of the applications before me today is for an interim freezing order here pending the decision on the claimant's s.25 application. The second application is for evidence to be provided in the form of documents from two banks, Co-operative Bank and NatWest pursuant to a letter of request issued by the DIFC Court.
The defendant, Mr Haigh, is currently in prison in the DIFC in connection with the same matters as are the subject of the proceedings there. That has led to difficulties for him and the lawyers whom he has instructed, previously another firm, but more recently Stephenson Harwood, and Mr Lawson who has represented him today has had only a limited opportunity to take instructions through Stephenson Harwood and has not had full opportunity to make all the points which conceivably he may have wished to put before me today. Nevertheless, he has been able to assist me in relation to both applications.
Notice of the applications was given to the defendant, perhaps unusually in the case of a freezing order application, but since the defendant is in custody in Dubai, there was no reason not to do so. However, the notice given was short with only two days between the notice of the application and today's hearing.
So far as the freezing order is concerned, I am sufficiently satisfied for the purpose of this interim application that there is a good arguable case on the merits of the invoice fraud claim. I bear in mind that the defendant has not had a full opportunity to put evidence before this court, but nevertheless he has had an opportunity, at least to some extent, to challenge the order made in Dubai there, but has not done so. That is not to say that there may not be a valid defence in due course, but I am satisfied that the good arguable case test is satisfied and also that there is sufficient evidence of a risk of dissipation of assets.
The freezing order which is sought here mirrors the terms of the order already made in Dubai, broadly speaking, with the differences that it is limited to assets within the jurisdiction of this court and that there is no application for disclosure of assets to be made pursuant to any order of this court. There was an order made by the DIFC Court for such disclosure of assets, which has not yet been complied with either in full or indeed at all. The defendant says that that has been due to difficulties for his lawyers in communicating with him in prison and that access to him is controlled, naturally enough, by the Dubai Prison Service and is very limited with only relatively infrequent and short visits allowed. He says, however, that there will be information about his assets provided, I think, by the coming Sunday, Sunday of course being a working day in Dubai.
The principles applicable to the grant of a freezing order here pursuant to the 1982 Act were set out by Neuberger J, in the case of Ryan v Friction Dynamics Limited [2001] CP Reports 75. In that judgment, Neuberger J referred to the case of Credit Suisse Fides Trust SA v Cuoghi [1998] QB 818, where the Court of Appeal stated the principle that, where a defendant and his assets are located outside the jurisdiction of the court seized of the substantive proceedings, it is most appropriate that protective measures should be granted by those courts best able to make their orders effective. In relation to orders taking direct effect against the assets, this means the court of the state where the assets are located and in relation to orders in personam, including orders for disclosure, this means the court of the state where the enjoined person resides.
In this case, the assets with which the current application is concerned are located here. They consist, so far as is known, of various bank accounts and of a property, a house, but the defendant is not only physically located in Dubai, he is actually in custody there.
The Cuoghi case also included some observations by Lord Bingham CJ, to the effect that on any application under s.25 the English Court must recognise that its role is subordinate to and must be supportive of the primary court.
Having referred to those broad principles, Neuberger J set out a series of numbered general principles applicable when the court is asked to exercise its jurisdiction under s.25. I need not set them all out, but in particular principle number six makes clear that the fact that there is a worldwide freezing order granted by the principal foreign court, does not prevent the English Court from granting a freezing order, at least in relation to English assets. It is commonly the case when the position is reversed and an injunction is given by the English Court as the primary court seized of the substantive claim, that a freezing order may be on terms which specifically envisage that the claimant will apply for freezing orders to support that primary order in foreign jurisdictions where assets are located. That is indeed the position here where the order of the Dubai Court contemplates and gives permission for an application to be made to this court.
Principle number seven stated by Neuberger J is that before an overlapping order is made under s.25, the court should expect to be given cogent reasons to justify it. Overlapping orders in that context mean applications where the same or essentially the same relief is sought in more than one jurisdiction, the consequence of which is that there will be increased costs and use of court time and possibly a risk of double jeopardy for defendants.
Later in the judgment, Neuberger J said this:
"I have not been referred to any specific provision, rule, case or practical example which demonstrates that the enforcement of the 1990 order against British defendants in respect of British assets would be more difficult or expensive or time consuming than enforcement of the freezing order, save that it is said that third parties and, in particular, the bank, with substantially all its assets in this...
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