Lakatamia Shipping Company Ltd v Nobu Su (aka Su Hsin Chi; aka Nobu Morimoto)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lady Justice Carr,Sir Nicholas Patten |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] EWCA Civ 1187 |
| Docket Number | Case No: A4/2021/0419 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1187
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Waksman
CL-2011-001058
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Asplin
Lady Justice Carr
and
Sir Nicholas Patten
Case No: A4/2021/0419
Stephen Phillips QC and James Goudkamp (instructed by Hill Dickinson LLP) for the Respondent
Thomas Grant QC, Ryan James Turner and Rory Forsyth (instructed by Ashfords LLP) for the Appellant
Hearing date: 15 July 2021
Approved Judgment
On 5 November 2014 the Respondent to this appeal, Lakatamia Shipping Company Ltd (“Lakatamia”), obtained judgment in the Commercial Court against the Appellant, Mr Nobu Su (“Mr Su”), for a sum which with interest now exceeds $60m: see Lakatamia Shipping Company Ltd v Su [2015] 1 WLR 216. Since then very little of the judgment debt has been recovered but Lakatamia has pursued Mr Su for the recovery of what is due and has made a series of applications in the Commercial Court designed to obtain the disclosure of assets which are available to satisfy the judgment debt.
Prior to the trial of the action Blair J made a worldwide freezing order against Mr Su and on 26 January 2018 Popplewell J granted an order on a without notice application which required Mr Su to surrender every passport and travel document that would enable him to leave the jurisdiction and which restrained him from leaving England and Wales until after he had attended court to give information about his means at a hearing under CPR 71 (“the Means Hearing”). The order also required Mr Su to disclose to the tipstaff the address where he intended to reside and an email address and telephone number. I shall refer to this is as a passport order.
The court has jurisdiction to make a passport order under s. 37(1) of the Senior Courts Act 1981 but the grant of such relief is a relatively recent development along with freezing and search orders. The first reported decision concerning a passport order is that of the Court of Appeal in Bayer A.G. v Winter [1986] 1 WLR 497 where the defendant was ordered to deliver up his passport and restrained from leaving the jurisdiction until disclosure had been given relating to counterfeit copies of the claimant's products. It was clear that if the defendant was allowed to leave the jurisdiction before disclosure took place there was a serious risk that the order for disclosure would be frustrated.
In his judgment at p.503C Fox LJ stressed that the relief sought was novel and that when exercising the jurisdiction to make an order under s. 37 on the basis that it appeared to be “just and convenient” to do so the court needed to keep firmly in mind the consequences for the defendant of having his liberty curtailed in this way:
“The time during which the first of those orders should run should – and Mr. Prescott accepts this – be of very limited duration. It is an interference with the liberty of the subject, so that the period should be no longer than is necessary to enable the plaintiffs to serve the Mareva and Anton Piller orders which they have obtained, and endeavour to obtain from the defendant the information which is referred to in those orders.”
Even with this safeguard in place the jurisdiction is not unlimited. Imprisonment is no longer available as a remedy for the non-payment of debts and it is common ground that the passport order jurisdiction cannot be used as a means of enforcing judgments by requiring the judgment debtor to remain within the jurisdiction and to reside in a particular place until the judgment debt is paid. In B v B (Injunction: Jurisdiction) [1998] 1 WLR 329 Wilson J refused to make a passport order restraining a husband who was resident overseas from leaving the jurisdiction until a costs order against him had been satisfied. That, he said, would convert the passport order from an aid to the court's established procedures for enforcing the judgment and make it a freestanding enforcement procedure in its own right.
The interference with the liberty of the respondent under a passport order must therefore be for no longer than is necessary to achieve the purpose for which it was granted. How long that actually is will necessarily depend upon the purpose for which it is granted. Most passport orders are granted (as in Bayer A.G. v Winter) to enable effective disclosure to be given and in the present case the passport order was limited in duration to the Means Hearing. But in many commercial cases involving foreign defendants the disclosure sought will be voluminous and complex and the time taken to bring on an effective hearing may be lengthy. The judge making the order will need to take into account the effect which being restrained from leaving the jurisdiction will have on a foreign defendant whose home and family life is abroad and to ensure that the terms and conditions of the order are proportionate. How that balance is to be achieved will vary depending on the facts and circumstances of each particular case.
The facts of the present case are by any standards extraordinary. More than 3 years after the passport order was made Mr Su remains subject to the injunction. His position is complicated by the fact that he has been found to have been in contempt as a result of breaching various interlocutory orders and he is currently in prison having been sentenced to a further term of 24 months in July of this year. The examination as to his means has been extended to a second hearing due to his failure to make full and complete disclosure of his assets at the original Means Hearing in February 2019. It is anticipated that this second hearing will take place in September when Mr Su will almost certainly still be in prison. The passport order (as subsequently continued and varied) now expires on 31 July unless extended. Lakatamia has yet to decide whether to make such an application.
Mr Su's appeal is against an order of Waksman J dated 21 January 2021 when he refused Mr Su's application to discharge his earlier order of 30 January 2020 under which Mr Su was restrained from leaving the jurisdiction until after the second Means Hearing. The principal ground for the application to discharge was that Mr Su's entry visa had expired so that he had become an overstayer and was therefore committing a criminal offence under s. 24 of the Immigration Act 1971. The judge had rejected this argument at the 30 January 2020 hearing and declined to revisit his decision on the point. But he also dismissed an argument that he should discharge his earlier order on account of the time which had elapsed since the continuation of the passport order on 30 January.
In the original grounds of appeal for which permission was obtained from Males LJ Mr Su contends that Waksman J's order of 21 January 2021 infringed Article 8 of the European Convention on Human Rights and was not in accordance with the law because it required him to commit the criminal offence of remaining in the UK without leave. But at the start of the hearing we granted permission to amend the grounds of appeal by adding two further grounds: (1) that the judge erred in treating the passage of time since his first order as legally irrelevant and therefore not a basis on which he could or should reconsider or discharge the passport order; and (2) that the judge had failed to follow general equitable principles in considering whether or not to discharge the order.
The position of Lakatamia, put very shortly, is that the judge was right to reject the arguments based on a breach of s. 24 of the Immigration Act or of Mr Su's Article 8 rights for the reasons which he gave. On the delay point they say that Mr Su is entirely responsible for their inability to have an effective Means Hearing any sooner and that the last 3 years have been characterised by repeated breaches of disclosure orders which themselves have resulted in Mr Su being committed to prison for contempt. Although a period of 3 years is exceptional and undesirable they say that it is justified on the facts of the present case.
Before turning to the grounds of appeal I need to set out in more detail some of the procedural history following the grant of the passport order.
On 10 January 2019 Mr Su arrived at Heathrow Airport en route to Germany and was served with the passports order. He surrendered his passport but gave police constables who served him with the passport order on behalf of the topstaff the name of a hotel which was different from where he in fact stayed and the number of a mobile telephone which was not working. Mr Su then travelled to Liverpool on 15 January where he attempted to board a ferry to Belfast but was arrested. The following day he appeared in court and was released subject to daily reporting requirements pending the Means Hearing.
This took place on 27 and 28 February 2019. One result of the hearing was to obtain confirmation from Mr Su that he either owned or had an interest in two properties in Monaco (the Villa Rignon and the...
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...Lakatamia Shipping Co Ltd v Su, [2020] EWHC 865 (Comm) .........................220 Lakatamia Shipping Co Ltd v Su, [2021] EWCA Civ 1187 ................................ 206 Lakatamia Shipping Co v Morimoto, [2019] EWCA Civ 2203 .......................... 190 Lake St Martin First Nation v C......