Santina Ltd v Rare Art (London) Ltd (trading as Koopman Rare Art)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Marcus Smith |
| Judgment Date | 06 April 2023 |
| Neutral Citation | [2023] EWHC 807 (Ch) |
| Docket Number | Claim No: BL-2021-001176 |
| Court | Chancery Division |
[2023] EWHC 807 (Ch)
THE HONOURABLE Mr Justice Marcus Smith
Claim No: BL-2021-001176
Appeal Ref: CH-2022-000194
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
7 Rolls Building
Fetter Lane, London,
EC4A 1NL
Daria Gleyze (instructed by Adams & Remers LLP) appeared on behalf of the Claimant/Respondent
Tom Morris (instructed by Teacher Stern LLP) appeared on behalf of the Defendant/Applicant
Hearing dates: 23 and 30 March 2023
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10.00 am on Thursday 6 April 2023 by circulation to the parties or their representative by email and by release to the National Archives
CONTENTS
| A. THE CLAIM | 2 |
| B. A HISTORY OF THE PROCEEDINGS | 2 |
| (1) The trial date | 2 |
| (2) The application for security for costs | 3 |
| (3) Permission to appeal the order of Deputy Master Glover; and the stays that preceded it | 3 |
| (4) The application for a freezing order | 4 |
| C. THE RETURN DATE | 6 |
| D. POINTS CONSIDERED IN THIS JUDGMENT | 6 |
| E. THE APPEAL AGAINST THE ORDER OF DEPUTY MASTER GLOVER | 7 |
| (1) The order under appeal | 7 |
| (2) Analysis | 8 |
| F. THE FREEZING ORDER OF EDWIN JOHNSON J | 12 |
| (1) Challenges to the freezing order | 12 |
| (2) Failure to make full and frank disclosure | 12 |
| (3) Jurisdiction | 15 |
| G. DISPOSITION | 19 |
A. THE CLAIM
By a claim form dated 16 July 2021, the Claimant, Santina Limited (“Santina”), a company domiciled in the Republic of Seychelles, began proceedings against the Defendant, Rare Art (London) Ltd, which trades under the name Koopman Rare Art (“Rare Art”).
Santina, acting by its agent, Mr Jonathan Leaver, had purchased a pair of silver-gilt soup tureens (the “Tureens”) from Rare Art. The Amended Particulars of Claim (I shall refer to these as the “Particulars of Claim”) allege that the sale was induced by a number of representations, which are said to have been false. It is alleged that the representations were made innocently, alternatively negligently, alternatively fraudulently.
The remedy claimed is primarily that of rescission. Santina seeks an order for the repayment of the purchase price, £181,500, and in return “is ready and willing to make the Tureens available for collection by [Rare Art]”.
The allegations advanced by Santina are denied by Rare Art. Rare Art's defence is pleaded in an Amended Defence (which I shall refer to as the “Defence”).
It is unnecessary to say more about the substantive allegations between the parties.
B. A HISTORY OF THE PROCEEDINGS
(1) The trial date
As is clear, the value at risk in these proceedings is not enormous: the Tureens were purchased for £181,500. Nor is the claim particularly complex, although I accept that the allegations advanced by Santina are extremely serious, and the level of factual controversy is high.
It was, therefore, pleasing to note that the trial of these proceedings was listed to begin on 11 November 2022, just under 18 months after the claim was commenced.
(2) The application for security for costs
By an application dated 25 May 2022, Rare Art made an application for security for costs against Santina, which was heard by Deputy Master Glover on 13 October 2022. By an order of that date, Deputy Master Glover ordered (amongst other things) that:
(1) Santina give security for Rare Art's costs in the amount of £130,000 by paying that sum into the Court Funds Office by 4:00pm on 27 October 2022.
(2) Unless Santina comply with this order, the proceedings be stayed without further order of the Court, save that Rare Art have liberty to apply to:
(i) Strike out or dismiss the proceedings; and
(ii) Immediately write to the Court advising it that the payment in security for costs had not been made and asking that the trial be vacated.
(3) Santina pay the costs of the application, in the amount of £14,000 by 4:00pm on 3 November 2022.
Santina did not pay the amount ordered by way of security for costs; nor did Santina pay the costs they had been ordered to pay in respect of the application.
The failure to provide the security ordered by Deputy Master Glover resulted in the trial being vacated.
(3) Permission to appeal the order of Deputy Master Glover; and the stays that preceded it
Santina sought permission to appeal the order of Deputy Master Glover. By an order dated 16 March 2023, Michael Green J granted the application on the papers. The reasons why the application for permission to appeal was granted are immaterial.
Prior to the question of permission to appeal being determined, Rare Art sought to have the claim struck out (as envisaged by the order of Deputy Master Glover). Such application (which was made on 31 October 2022) was stayed by order of Zacaroli J dated 8 November 2022 pending determination of Santina's application for permission to appeal and – if permission to appeal was granted – pending determination of the appeal itself.
(4) The application for a freezing order
On 14 March 2023, Edwin Johnson J was applied to (in the Applications Court in the Chancery Division) for an ex parte freezing order on behalf of Rare Art. The application was made without any notice at all to Santina, and was acceded to by Edwin Johnson J.
Before I come to the order made by Edwin Johnson J, I should set out the headline points of what the Judge was told on this application:
(1) The Judge was told about the state of the proceedings, and in particular was informed of:
(i) The order for security for costs that had been made by Deputy Master Glover;
(ii) The fact that this order had not been complied with;
(iii) The strike out application that Rare Art had commenced pursuant to the order of Deputy Master Glover;
(iv) The stay of that application that had been imposed, pending Santina's application for permission to appeal, and the fact that Rare Art would resume its application to strike out as soon as it could; and
(v) The costs order of £14,000 that had been made in favour of Rare Art.
(2) The criteria for the granting of a freezing injunction, namely that:
(i) An applicant must show a good arguable case;
(ii) There were objective facts from which it could be inferred that a respondent was likely to move assets or dissipate them;
(iii) There was a real risk that a future judgment would not be met because of an unjustifiable disposition of assets.
(3) The basis for the application was that “[Rare Art] will not be able to recover what is owed to it under an unsatisfied judgment for costs”. This is a point of some importance, to which I will come. For the present, I should note that the jurisdictional basis for the freezing order was the costs order of £14,000, and that this quotation comes from paragraph 2 of the written submissions of Mr Morris, who appeared for Rare Art. The point was put a little differently later on in the same written submissions at paragraph 10:
[Rare Art] has a good arguable case. It successfully obtained an order that the [Santina] put up security for its costs and, under that order, was entitled to apply to strike out [Santina's] claim if security was not put up. An application for strike out has been made but is stayed pending [Santina's] application for permission to appeal. If permission is refused or the appeal is dismissed, [Rare Art's] strike out application will be resurrected. There is no credible defence to that application and an order that [Santina] pay [Rare Art's] costs of the litigation will follow. [Rare Art] moreover already has a costs order in its favour in respect for the security for costs application which has not been satisfied.
I should stress that this is only a statement of the headline points addressed to the Judge. It is quite clear from the note of the judgment of Edwin Johnson J that the Judge heard detailed submissions from Mr Morris and gave a carefully considered ex tempore judgment giving the reasons for the order he was going to make. I have also seen and read a note of what Mr Morris said to the Judge in oral submissions; I have already referred to Mr Morris' written submissions.
Turning to that order, Edwin Johnson J granted an ex parte freezing injunction under a penal notice. The injunction was a worldwide one, in that Santina must not:
(1) Remove from England and Wales or in any way dispose of, deal with or diminish the value of any of its assets which are in England and Wales up to the value of £200,000; or
(2) In any way dispose of, deal with or diminish the value of any of its assets whether they are in or outside England and Wales up to the same value.
These prohibitions extended, in particular, to the Tureens, as paragraph 6 of the order made clear.
The return date of the injunction was 23 March 2023. I was the Judge on this return date sitting in the Applications Court.
C. THE RETURN DATE
On the return, it was clear from the written submissions of Santina and Rare Art that this was not a matter fit for the Applications Court. The points raised would clearly take more than two hours (not including reading and the time for giving judgment), partly because of the complexities concerning the grant of the freezing order (which I shall come to), but also because the grant of the freezing order was (to an extent at least) related to the appeal of the security for costs order of Deputy Master Glover.
Accordingly, I determined (after hearing the parties on this) that I would hear the parties' submissions on the continuation or setting aside of the freezing order made by Edwin Johnson J, but not determine the matter. I would hear the appeal from...
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