Tombstone Ltd v Raja & Anor

An application to set aside an order made without notice is governed by the Civil Procedure Rules 1998 where their provisions cover the subject matter. The court cannot use its inherent jurisdiction to adopt an inconsistent approach or outcome.

Rule 23.10 applies whether the without-notice application was written or oral. The court exercises its discretion in accordance with the overriding objective. An important order will almost always be set aside, but exceptional circumstances, including inexcusable delay and resulting prejudice, may justify preserving its effect.

On every without-notice application, parties and advocates must disclose all material matters. They cannot assume that a judge remembers facts from earlier hearings.

Tombstone Ltd appealed from Lightman J's decision, reported at [2007] EWHC 1743 (Ch), dismissing claims in trespass and conversion against Mr Raja's estate and its solicitors, Healys.

A writ sequestrating the assets of Mr van Hoogstraten had been amended without notice to extend to assets held by Tombstone, although Tombstone was neither a party nor alleged to be in contempt. The amendment was procedurally irregular. It remained in force until the Court of Appeal set it aside consequentially upon reversing the underlying finding of contempt.

Lightman J held that the respondents retained the defence of judicial authority because the court should not retrospectively withdraw the order's protection. The central issue was whether the order had to be treated as a nullity under the court's inherent jurisdiction or whether rule 23.10 conferred a discretion governed by the overriding objective. The parties also appealed and cross-appealed against an order requiring Tombstone to pay 60% of the relevant costs.

1. The appeals were dismissed. Rule 23.10 of the Civil Procedure Rules 1998 governed Tombstone's ability to challenge the order made without notice. Rules 23.9 and 23.10 apply whether the application was supported by a written application notice or was made orally. A literal distinction between those situations would make no sense and would conflict with the overriding objective.

2. Where the CPR govern an application, the court must proceed under the rules. Its inherent jurisdiction may supplement procedural rules but cannot support an inconsistent procedure or outcome. Even if there had been a lacuna, the inherent jurisdiction would have had to be exercised conformably with the CPR so that the procedural regime remained coherent.

3. An application under rule 23.10 engages a discretion directed to a just result. An order substantially affecting a person's rights will almost always be set aside when made without notice, but the result is not automatic. Exceptional circumstances may justify leaving the order, or its material consequences, undisturbed. The reasoning in Nelson v Clearsprings (Management) Ltd [2006] EWCA Civ 1252 formed part of that decision and supported this approach.

4. Lightman J had exercised that discretion lawfully. Tombstone knew the substance of the order, believed that it was wrong and had access to legal advice and funding. It nevertheless delayed for years before alleging procedural irregularity, while the respondents reasonably relied on the order and could have sought the court's guidance had the issue been raised promptly. Those findings justified preserving the defence of judicial authority despite the serious irregularities in obtaining the order.

5. Parties and advocates making a without-notice application owe high duties to the court. They cannot assume that a judge remembers all material facts because the judge dealt with earlier stages of the litigation. Full disclosure is essential, and relevant documents should ordinarily be supplied in advance. Lightman J was entitled to find material non-disclosure, misrepresentation and breaches of duty.

6. The Court of Appeal also upheld the costs order. The judge applied the correct principles, recognised the respondents' overall success and accounted for the issues they lost, their conduct in obtaining the order, and Tombstone's delay.

1. Court of Appeal (Civil Division): By [2008] EWCA Civ 1444, dismissed Tombstone's liability appeal and both sides' challenges to the costs order.

2. High Court, Chancery Division: Lightman J, in [2007] EWHC 1743 (Ch), held that the amendment order had been obtained irregularly but preserved its protection against the tort claims. He dismissed those claims and ordered Tombstone to pay 60% of the relevant costs.