Raja v Van Hoogstraten

A successful appellant will ordinarily receive the costs of the appeal and the relevant proceedings below. A possible future application based on alleged abuse of process does not justify withholding or deferring those costs where the appeal concerned a discrete issue and succeeded because the enforcement process was seriously flawed. The normal modern approach is to deal with costs as each issue is resolved. Costs should not ordinarily be deferred, set off, or placed in a blocked account unless a proper case for departure is shown. A freezing order may provide the appropriate safeguard against dissipation. The court may order an interim payment on account where the sum represents a safe estimate of the recoverable costs, allowing a reasonable period for payment.

The judgment concerned consequential orders following earlier appeals brought by Nicholas Van Hoogstraten against orders made by Peter Smith J in proceedings brought by Asgar Sabir Raja on behalf of the estate of Mohammed Sabir Raja. The Court of Appeal had set aside a writ of sequestration and discharged the sequestrators after finding that the contempt finding and resulting enforcement orders were unsustainable. The remaining issues concerned costs, payment of costs, an interim payment on account, and Tombstone Ltd’s proposed intervention. The central questions were whether costs should follow the successful appeals and whether payment should await final determination of the action.

1. Disposition. The appellant had succeeded on the appeals concerning contempt, striking out the defence and sequestration. The court ordered that he have his costs in the Court of Appeal and below.
2. The successful appellant was not to be deprived of the usual costs order because the claimant might later allege or establish that he had been involved in the death of Mohammed Sabir Raja or had abused the process of the court. The appeals had turned on the discrete issue of whether the contempt finding and its enforcement consequences were justified. The enforcement process was held to be seriously flawed.
3. The same approach applied to costs below associated with enforcing the disclosure obligations in the freezing order. Although costs relating to the alternative abuse allegation raised different considerations, they were likely to be small and any future finding would require a new trial. It was therefore inappropriate to separate those costs and create an exception to the usual order.
4. The court rejected deferral of payment or payment into a blocked account. The modern practice following Lord Woolf’s report and the introduction of the Civil Procedure Rules was a pay-as-you-go approach, under which costs are dealt with as applications are resolved. The freezing order already restricted dissipation of assets, and any inadequacy in its safeguards could be addressed by an application to vary or discharge it. No further security was justified.
5. An interim payment of £90,000 was ordered, representing a safe estimate of the minimum likely recovery under the costs order. Given the probable need to raise funds through property sales, payment was directed within two months. Tombstone’s appeal concerning permission to intervene required no further order because the underlying ownership issue had not been decided and intervention had consequently become unnecessary.

• Court of Appeal (Civil Division): Earlier appeals were allowed, the writ of sequestration was set aside and the sequestrators were discharged. Consequential questions concerning costs and Tombstone Ltd’s proposed intervention were reserved for the present hearing. The court ordered costs to the successful appellant, an interim payment of £90,000 within two months, and no further order on Tombstone Ltd’s appeal.
• High Court of Justice, Chancery Division: Orders made by Peter Smith J included a finding of contempt, striking out the defence, making a sequestration order, and refusing Tombstone Ltd permission to intervene.