Raja v Van Hoogstraten & Anor

A court may hear an unpurged contemnor where the interests of justice favour doing so. In committal proceedings, an alleged contemnor must receive a fair opportunity to prepare and present a defence.

A defendant who timeously challenges disclosure obligations in a freezing order has no automatic right to a stay. The court must, however, determine urgently whether disclosure should be stayed, balancing the prejudice to each party. It should not find contempt without first permitting the defendant to be heard on that question.

Striking out a defence as punishment for misconduct is inappropriate unless the misconduct creates a real risk that the further conduct of the proceedings will be unsatisfactory. Failure to disclose assets in aid of a freezing order does not itself imperil the fairness of the trial.

The claimant pursued civil claims arising from property and lending dealings with Nicholas van Hoogstraten. Without notice, the High Court made a worldwide freezing order requiring disclosure of assets. Van Hoogstraten, then imprisoned, applied timeously to set it aside, but the court lost or failed to process his application.

The High Court subsequently found him in contempt at a hearing which he wished, but was unable, to attend. It imposed escalating fines, struck out his defence and counterclaim, entered judgment on liability and authorised sequestration. The strike-out rested on inadequate asset disclosure and on a criminal conviction said to establish intimidation of the original claimant. That conviction was later quashed.

The appeals concerned procedural fairness in the committal proceedings, the treatment of the outstanding challenge to the freezing order, the proper scope of the disclosure obligation and whether the misconduct justified striking out the defence.

1. Appeals allowed. The Court of Appeal unanimously set aside the material disclosure deadlines, findings of contempt, fines, costs order, strike-out, judgment on liability and sequestration. The discharge of the sequestrators was remitted to the Chancery Division.
2. Although an appellate court may decline to hear an unpurged contemnor, there is no general rule requiring that result. The governing question is whether the interests of justice are better served by hearing or refusing to hear the party. Here, refusing to hear the appeals risked compounding a serious injustice because the contempt arose from orders which had been challenged timeously but never reviewed.
3. Committal proceedings engaged article 6 of the Convention. The judge knew that the alleged contemnor wished to defend himself in person and had been prevented from attending by circumstances beyond his control. Proceeding in his absence, after shortening the prescribed notice period, denied him a proper opportunity to prepare and present his defence. The judge should have adjourned the hearing.
4. A freezing order normally requires ancillary disclosure so that it can be policed. A defendant who challenges the order has no automatic entitlement to stay disclosure. Nevertheless, the court must consider urgently where the balance of prejudice lies. Motorola Credit Corp v Uzan [2002] EWCA Civ 989 did not authorise the court to refuse to consider a timeous challenge or interim-stay application until disclosure had already occurred.
5. The disclosure order was materially ambiguous. It was doubtful whether an extended definition of assets subject to restraint also enlarged the assets which had to be disclosed, particularly assets held by persons who might follow the defendant's wishes without being legally obliged to do so. That uncertainty provided no secure foundation for contempt or an unless order.
6. Striking out was also disproportionate. Disclosure was ancillary to preserving assets rather than necessary for a fair trial of the substantive claims. Under the principle applied in Arrow Nominees Inc v Blackledge and Douglas v Hello! Ltd (No 3), a litigant should not be driven from the judgment seat as punishment unless the misconduct creates a real risk that further proceedings will be unsatisfactory.
7. The alternative strike-out ground could not stand. Once the criminal conviction had been quashed, the criminal judge's summing up was not evidence establishing that the defendant had intimidated the original claimant.

1. Court of Appeal (Civil Division): By [2004] EWCA Civ 968, unanimously allowed the material appeals. It set aside the disclosure deadlines in the order of 10 September 2002, the findings and sanctions for contempt, the costs order of 24 October 2002, paragraphs 1–12 of the order of 12 December 2002 and the writ of sequestration.
2. High Court, Chancery Division: Mr Justice Peter Smith found contempt on 11 October 2002. On 12 December 2002 he struck out the defence and counterclaim, entered judgment for the claimant on liability, ordered an interim payment, imposed fines and authorised sequestration. No neutral citation for those decisions is stated.
3. High Court, Chancery Division: Mr Justice Rimer made the original freezing and disclosure order without notice on 27 August 2002. Mr Justice Patten varied it on 10 September 2002. No neutral citations are stated.