Kazeminy & Ors v Siddiqi & Ors

On an application for conditional summary judgment, a defendant who says that payment into court would stifle the defence bears the burden of proving that payment is beyond his means. The court must assess the evidence concerning assets, expenditure, funding sources and disclosure with appropriate caution. Even where the claimed sum is very substantial, the court retains a discretion to order a lower amount that is likely to be affordable and will not stifle the defence. A payment-in order may be made against appropriate defendants only, with allowance for claims below the ordered sum.

The claimants had obtained a conditional order following an earlier summary judgment decision. The defendants were required to pay a sum into court unless they could establish that they lacked the means to do so and that the order would stifle their defence.

The first defendant relied on historic entrepreneurial activity, asset sales, corporate funding arrangements and limited present resources. The court examined alleged non-disclosures, inconsistent evidence, recent payments to creditors, lifestyle evidence and anticipated company funding. The central issues were whether the defendants had discharged the burden concerning their means and, if not, what sum should be ordered.

1. Burden and evidence. The first defendant had not discharged the burden of proving that payment of a sum exceeding approximately $100,000 was beyond his means or would stifle the defence. The court was entitled to scrutinise the unexplained funding of substantial corporate payments, recent payments to creditors, the defendant’s affluent lifestyle and inconsistencies in evidence.
2. Assessment of means. The evidence did not adequately explain how much of the funding provided to the companies had been generated from earlier entrepreneurial activities or asset sales. The court was entitled to exercise considerable caution before accepting the defendant’s account.
3. Discretion as to amount. Although the approximate amount of the claims was $25 million, the court retained a discretion as to the payment required. The financial difficulties of two companies and the need for outside support created a real risk that an order for $25 million would stifle the defence.
4. Order made. An order for payment of £5 million was likely to be possible and was not likely to stifle the defence. No order was made against the two corporate defendants in liquidation, and the order was to allow for any defendant whose claim was below £5 million.
5. Publication. Although the hearing had taken place in private, publication of the judgment was appropriate and consistent with the principle discussed in Department of Economic Policy and Development of the City of Moscow v Bankers Trust, [2004] EWCA Civ 314. The applications for redaction were refused because assertion of personal or commercially sensitive information, without more, did not establish a sufficient case for confidentiality.