NML Capital Ltd v Chapman Freeborn Holdings Ltd et al

The Court of Appeal considered the scope of the Norwich Pharmacal jurisdiction in the context of post-judgment enforcement. The court held that Norwich Pharmacal relief requires that the third party be "mixed up" or involved in the wrongdoing; mere trading with a judgment debtor is insufficient. The court emphasised that facilitation is not a separate strict requirement but that there must be a connection by which the third party's conduct furthers the wrongful transaction. The judge was also entitled to take into account the commercial prejudice to an innocent third party when exercising discretion.

Applying those principles, the court found that Chapman Freeborn, an aircraft charter broker, was not involved in Argentina's refusal to satisfy its judgment and therefore was not properly the subject of a Norwich Pharmacal order; the appeal was dismissed.

Background and parties: NML, a judgment creditor of the Republic of Argentina, sought Norwich Pharmacal disclosure against Chapman Freeborn, an English aircraft charter broker, in order to discover charter contract details and bank account information to assist enforcement of an English judgment obtained against Argentina. The charter arranged by Chapman Freeborn for the Argentine presidential tour included a significant broking fee and a specific international itinerary.

Procedural posture: Cooke J in the Commercial Court made a without-notice order but allowed time for the respondents to appear and contest disclosure. Chapman Freeborn appeared and objected; Cooke J refused relief on discretionary grounds. NML obtained permission to appeal to the Court of Appeal and challenged Cooke J's exercise of discretion and certain legal conclusions. Chapman Freeborn sought to uphold the decision and argued also that Norwich Pharmacal relief does not extend to post-judgment enforcement or that it was not "mixed up" in wrongdoing.

Issues framed:

• whether a third party who trades with a judgment debtor can be said to be "mixed up" in the debtor's alleged wrongdoing so as to justify Norwich Pharmacal disclosure;
• whether Norwich Pharmacal relief is available post-judgment in aid of execution;
• whether Cooke J erred in his discretionary balancing, including the weight given to the respondent's commercial interests.

Court's reasoning: The court reviewed the authorities on Norwich Pharmacal and concluded that the third party must be involved in the furtherance of the transaction identified as the relevant wrongdoing; mere trading with a judgment debtor does not suffice. The relevant wrongdoing was identified as Argentina's failure to satisfy its judgment debt; there was no real connection between Chapman Freeborn's broking activity and that failure. The Court observed that permitting Norwich Pharmacal relief on the basis of ordinary trading would create an excessively wide and burdensome jurisdiction and risk chilling international commerce. The court also accepted that, even if Norwich Pharmacal relief can be available post-judgment, it would be in very particular and restricted circumstances, likely only where the conduct involved amounted to "wilful evasion" of execution. Finally, the Court endorsed Cooke J's legitimate consideration of commercial prejudice to Chapman Freeborn in the exercise of his discretion.

The appeal is dismissed. The Court of Appeal held that Norwich Pharmacal relief requires that the third party be mixed up in or connected to the wrongdoing; mere trading with a judgment debtor is insufficient. Chapman Freeborn was not so mixed up in Argentina's failure to satisfy the judgment and the judge was entitled to weigh the commercial prejudice to Chapman Freeborn. The court also observed that, if available post-judgment, Norwich Pharmacal relief would be confined to narrow cases such as wilful evasion of execution.

Appeal from the Commercial Court (Cooke J) ((2013) EWHC 266 (Comm)). Permission to appeal had been granted (Longmore LJ). The present judgment is the Court of Appeal decision reported at [2013] EWCA Civ 589. The judgment also recorded the earlier related Supreme Court decision on the underlying dispute: NML Capital Limited v Republic of Argentina [2011] UKSC 31.