The Arab Monetary Fund v Hashim & Ors

A court does not begin with a rigid rule that a contemnor cannot be heard. It must exercise a flexible discretion, asking whether justice is better served by hearing the appeal or refusing it, while giving great weight to prompt compliance with court orders. Persistent, contumacious disobedience that obstructs enforcement may justify debarring an appeal; a single historic breach and an arguable challenge may not. For security for costs, special circumstances shift the burden to the appellant to show inability to provide security from any source. Legal aid is relevant but does not confer immunity.

The Arab Monetary Fund obtained substantial relief against members of the Hashim family following findings by Chadwick J that Dr Hashim had misappropriated its funds and that assets had been transferred through members of his family. Appeals were brought against the resulting orders.

The AMF made four applications: to debar Dr and Mrs Hashim from appealing because of unpurged contempt; to strike out Jafar and Omar’s appeals concerning Canadian properties; to obtain security for the costs of the appeals; and to stay taxation of costs. The central issues were whether contempt justified refusing to hear an appeal, whether the property appeals were plainly abusive or academic, and whether security would be just in the case of legally aided appellants resident abroad.

Lord Bingham of Cornhill delivered the judgment. Lord Justices Peter Gibson and Phillips agreed.

1. Contempt and the right to appeal. The court should not start from a rigid rule that a contemnor cannot be heard and then search for an exception. It should exercise a flexible discretion by asking whether the interests of justice favour hearing or refusing the appeal, giving paramount importance to prompt and unquestioning observance of court orders. The approach in [1991] AC 1 was applied. Dr Hashim’s continuing, deliberate and serious contempts obstructed the AMF’s ability to trace assets and obtain the fruits of judgment. His appeal was therefore struck out. Mrs Hashim’s case was different: her contempt arose from one transfer, and she had arguable grounds concerning constructive trusteeship and costs. Her appeal was not barred.
2. Strike-out of the Canadian-property appeals. The Court of Appeal had jurisdiction to strike out a notice of appeal for frivolity, vexation or abuse only in a clear and obvious case requiring no extensive factual inquiry. Even assuming that Canadian enforcement steps could not be undone, the court was reluctant to conclude that it was powerless to provide relief for serious unjustified injury caused by an erroneous judgment. The applications against Jafar and Omar were refused.
3. Security for costs. Under Order 59, rule 10(5), the respondent must first establish special circumstances and that security would be just. The appellant must then show an arguable appeal and inability to provide security, including from any other source. Legal aid does not confer immunity. The Legal Aid Act 1988, section 17(1), and Regulation 123 of the Civil Legal Aid (General) Regulations 1989 limit security to a properly reasonable amount, but do not prevent an order. The Legal Aid Board’s assessment is not binding on the court. Residence in Arizona, difficulty enforcing costs and evidence of undisclosed resources justified security orders against Mrs Hashim, Jafar and Omar.
4. Costs. Taxation of costs was stayed pending determination of the appeals or further order, with a set-off between costs payable to and by the AMF. Security was to be quantified by the Registrar, and failure to provide it within 56 days would result in dismissal of the relevant appeal without further order.

• Court of Appeal (Civil Division) Determined four interlocutory applications arising from the pending appeals. Dr Hashim’s appeal was struck out, while the other applications were resolved as set out in the order.
• High Court of Justice, Chancery Division Chadwick J tried the action beginning in January 1993 and gave judgment in stages during 1994. The final order was sealed on 29 July 1994. The judge found misappropriation, breach of trust, contempt and liability for costs.