Raja v Van Hoogstraten & Ors

A High Court order cannot be treated as a nullity merely because it was made in error or irregularly. Errors in exercising jurisdiction ordinarily provide grounds for appeal. However, where an order was obtained without notice by serious misrepresentation or non-disclosure, the court may set it aside and withdraw the protection it would otherwise provide. That discretion is governed by all the circumstances, including the culpability of the breach, the administration of justice, proportionality, promptness and delay. A party which knowingly stands by while an order remains in force may later be refused relief where reopening the matter would be unjust or oppressive.

The judgment concerned claims by Tombstone Limited against the Estate of Mohammed Raja and Healys arising from a sequestration order and amended writ obtained in December 2002. The writ extended sequestration to Tombstone’s assets, although Tombstone was not a party to the proceedings and had not been accused of contempt.

The Court of Appeal later set aside the orders after allowing Mr van Hoogstraten’s appeal against the finding of contempt and remitted the damages question. Tombstone subsequently alleged that the order and writ had been irregularly obtained and claimed damages for trespass and conversion by the sequestrators. The issues were whether the defendants were jointly responsible for those acts, whether the order protected them, and whether Tombstone had established recoverable loss.

1. Liability in principle. By applying for and obtaining the December 2002 order and amended writ, the Estate and Healys procured duties requiring the sequestrators to identify, collect and realise Tombstone’s assets. They were therefore parties to any resulting acts of trespass or conversion. The immunity of the sequestrators themselves did not automatically extend to those who obtained the process.
2. Validity and irregularity. Sequestration is a serious contempt remedy and ordinarily cannot be made against a non-party without submission to the jurisdiction. Nevertheless, an order of a court of unlimited jurisdiction cannot be a nullity merely because the court exercised its jurisdiction improperly. The distinction is between absence of jurisdiction and irregularity in its exercise. The December 2002 order and amended writ were therefore valid orders, although obtained irregularly.
3. The serious misrepresentations, non-disclosures and failure to observe the procedural safeguards applicable to the without-notice application would have justified setting aside the order and withdrawing its protective effect on a prompt application by Tombstone. Under the post-CPR approach, that result depended on the court’s discretion, having regard to culpability, the administration of justice, proportionality, promptness and delay.
4. That relief was nevertheless refused. Tombstone, treated as the corporate embodiment of Mr van Hoogstraten, knew that the order was vulnerable, had repeated opportunities to challenge it, stood by while others made ineffective applications, and waited until 2006 to raise irregularity. Withdrawal of protection after that delay would have been unjust and oppressive. The application would also have been an abuse of process if necessary.
5. The damages claims independently failed. Tombstone was not in possession or occupation of the let properties, and no permanent trespass injurious to the reversion was pleaded or proved. The conversion claim concerned choses in action, but OGB v Allan [2006] 2 WLR 920 established that choses in action could not be converted. A proposed new case raised after trial was rejected as procedurally unfair.
6. All claims against Healys and the Section G claims against the Estate were dismissed.

• Court of Appeal: On 21 July 2004, the court allowed Mr van Hoogstraten’s appeals, set aside the contempt-related orders and remitted the question of entitlement to an inquiry as to damages. The judgment under appeal is not otherwise cited by a neutral citation in the supplied text.
• High Court (Chancery Division): The present court dismissed all claims against Healys and the Section G claims against the Estate.