Raja v Van Hoogstraten (No 9)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery : |
| Judgment Date | 17 December 2008 |
| Neutral Citation | [2008] EWCA Civ 1444 |
| Docket Number | Case No: A3/2007/1922 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 December 2008 |
[2008] EWCA Civ 1444
Lord Justice Mummery
Lord Justice Dyson and
Lord Justice Maurice Kay
Case No: A3/2007/1922
CH 1993 R 6492
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE LIGHTMAN
Royal Courts of Justice
Strand,
London, WC2A 2LL
MR NIGEL JONES QC and MR ROBERT LEONARD (instructed by Messrs Engleharts) for the Appellant
MR STEPHEN MEACHAM Solicitor of Messrs Sabeers for the First Respondent
MR ANDREW ONSLOW QC and MR CHARLES DOUGHERTY (instructed by Kennedys) for the Second Respondents
Hearing dates: 17 th, 18 th & 19 th June 2008
All the members of the court have contributed to the writing of this judgment.
A. AN OVERVIEW
The principal issue in this unusual case stems from the finding of the trial judge (Lightman J) that the respondents irregularly obtained a court order from Peter Smith J on 13 December 200The order was for the amendment of a writ of sequestration. As a result of the amendment the sequestration applied not only to assets held in the name of the individual (Mr Nicholas van Hoogstraten), against whom it was originally issued for his alleged contempt of court, but also to his assets held in the name of Tombstone Limited (Tombstone). The appellant Tombstone was not a party to the litigation. It was not alleged to be in contempt of any court order. No notice of the application to the court was given to it. It was given no opportunity to object to the amendment on the ground that it owned the assets held in its name.
As fully explained in the judgment below ( [2007] EWHC 1743 (Ch)) the writ of sequestration was issued on the respondents' application against the assets of Mr Nicholas van Hoogstraten as the first defendant in an action being pursued against him by the respondents. He was the sole director of Tombstone, a substantial property company. It was controlled by him at all relevant times. He made decisions and gave instructions on its behalf.
Mr van Hoogstraten had been found guilty by Peter Smith J on 11 October 2002 of contempt of court for not complying with an order for the disclosure of his assets. Disclosure was required by a freezing order obtained by the respondents from Rimer J in August 2002. The respondents obtained leave for the issue of a writ of sequestration against him to enforce obedience to the court order. Then they obtained the order for the Tombstone amendment. Tombstone claimed that, as the order for the amendment was irregularly obtained against it as a non-party, innocent of any contempt and without prior notice, it was entitled, as of right, to have the order set aside as a nullity. The effect of setting the order aside as a nullity would be to render the respondents liable to compensate it for the loss and damage inflicted by alleged tortious acts of trespass to, and conversion of, its assets. Although the acts were committed by the sequestrators, the respondents were liable to Tombstone in damages by reason of having procured and authorised the sequestration by irregularly obtaining the amendment order.
The finding of procedural irregularity meant that Lightman J had to determine the nature of the court's power to set aside the 13 December order. He also had to consider, in the context of Tombstone's tort claims, the effect of setting it aside on the lawfulness of acts done by the respondents while the court order was in force, and on the availability of the respondents' pleaded defence of judicial authority.
In his judgment of 26 July 2007 Lightman J upheld the respondents' defence of judicial authority. They were not liable for the torts of trespass and conversion. He dismissed Tombstone's claims against them for damages, as set out in Section G of its Particulars of Claim.
Tombstone now appeals with permission given by Rimer LJ on 21 November 200The respondents to the appeal are (1) the estate of the late Mr Mohammed Raja, who was the original claimant in the action against Mr van Hoogstraten, but ceased to be so in the criminal circumstances described later, and (2) Healys, the firm of solicitors who acted for Mr Raja's estate (the Estate) in obtaining both the original writ of sequestration and the order for the amendment of it. At that time the sequestrators also instructed Healys.
It is common ground that sequestrators, as officers of the court who act under the order of the court, are entitled to immunity from suit (see Gosset v. Howard (1845) 10 QB 359 at 453–4). The respondents do not enjoy the same immunity. The pleading in their defence was that the conduct complained of by Tombstone as tortious was authorised by an order of the High Court i.e. the order of Peter Smith J dated 13 December 2002. They denied that the order was a nullity or that, on being set aside, it should be treated as having been a nullity. They asserted that, while it was in force, it was a valid order providing legal protection to those who had obtained it and acted upon it: see Williams v. Smith (1863) 14 CB (NS) 596 at 621–622, 623–4 and 625; Smith v. Sydney (1871) QB 203 at 206–207 (distinguishing between acts of the court and acts of the parties); and Clerk & Lindsell on Torts (19 th ed paras 15–44 to 15–46. (It is not alleged that the respondents are legally liable in damages to Tombstone simply for having obtained the issue of the writ of sequestration, or for otherwise irregularly issuing execution or legal proceedings, or for taking enforcement measures through the court.)
In this appeal Tombstone says that Lightman J's approach to the irregularly obtained order and its legal consequences was wrong. He relied on discretionary powers in the Civil Procedure Rules (CPR). He exercised the discretion under the CPR so as to preserve to the respondents the protection of the court order for acts done pursuant to it. Tombstone contends that the relevant power to set aside the order was that available under the inherent jurisdiction of the court. In the exercise of the inherent jurisdiction the irregular order could and should be set aside as of right ( ex debitojustitiae). It should be treated as a nullity, as never having had a legal existence. The respondents would thereby lose all protection afforded by the court order. There would be no defence of judicial authority for tortious acts to Tombstone's assets procured and authorised by them.
On the appeal Mr Nigel Jones QC appeared for Tombstone. Mr Andrew Onslow QC presented the case for Healys. The Estate, appearing by its solicitor, adopted Mr Onslow's submissions. Mr van Hoogstraten neither appeared nor was he represented.
There is also a costs appeal against an order of Lightman J. The respondents appeal and Tombstone's cross appeals against Lightman J's order dated 9 November 2007 that Tombstone pay 60% of the costs of the Section G claims in the re-amended particulars of claim incurred by the respondents.
B. BACKGROUND DETAIL
Mr Raja was a property developer. On 8 October 1993 he began an action for damages against Mr van Hoogstraten. In April 1999 he obtained the leave of the court to amend his particulars of claim to plead fraud.
On 2 July 1999 Mr Raja was shot dead. Arrests and criminal charges followed in September 2001. Mr van Hoogstraten was accused of engaging 2 men to murder Mr Raja. On 22 July 2002 the two gunmen were convicted of Mr Raja's murder. Mr van Hoogstraten was acquitted of murder. He was convicted of manslaughter and sentenced to 10 years imprisonment. The Court of Appeal quashed his manslaughter conviction in July 2003 and gave directions leading to his re-indictment. Mr van Hoogstraten remained in prison until December 2003 when the fresh indictment was quashed. He was then released from prison.
In the civil proceedings Lightman J gave a series of judgments culminating in a judgment of 19 December 2005 in which he held that Mr van Hoogstraten had hired two thugs to murder Mr Raja in order to halt the prosecution of his claim. The Court of Appeal refused permission to appeal against that judgment.
The civil proceedings continued while Mr van Hoogstraten was in prison. Mr Raja's son Asgar Sabir Raja (Asgar) had been appointed to represent the Estate in the action. He was later replaced by his mother, who was the widow and executrix of Mr Raja. Asgar was authorised to represent the Estate at the hearing of this part of the case before Lightman J.
The relevant events in this part of the civil proceedings date from August 2002 when the Estate applied to the court for permission to re-amend the particulars of claim, plead the criminal conviction and obtain judgment against Mr van Hoogstraten by reason of the conviction. On 27 August 2002, without notice, the Estate applied to the court for a freezing order over the assets which Mr van Hoogstraten owned or controlled. Rimer J granted a freezing order over all his assets. Orders were made for the provision of information within 1 week of the service of the order in an affidavit of all Mr van Hoogstraten's assets worldwide exceeding £10,000 in value, whether in his own name or not (paragraph 9). Schedule E to the freezing order listed, as subject to the order, various properties that were registered in the name of Tombstone. Mr van Hoogstraten was believed to have a beneficial interest in the properties. In Schedule F to the order Tombstone itself appeared in the list of businesses and enterprises owned or controlled by Mr van...
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