Behbehani v Behbehani

A financial remedy judgment that is not binding on a non-party does not thereby lose its enforcement value against assets found to be beneficially owned by the judgment debtor. The non-party’s protection lies in intervention and determination of its asserted rights, not in setting aside enforcement on a bare assertion of ownership. Non-joinder at the original hearing is not an absolute bar where enforcement is later sought. A receiver may be appointed by way of equitable execution over foreign property, subject to the limits of in personam relief and respect for third-party rights. Such enforcement is not an action on the judgment for limitation purposes. Issue estoppel and recognition objections fail where earlier proceedings concerned a materially different issue or remedy.

The appellant wife had obtained a financial remedy order requiring the respondent husband to pay a £20 million lump sum. The original judgment found that assets legally held through companies were beneficially owned by the husband. The husband paid nothing.

In July 2017, the High Court appointed receivers over shares held by two Irish companies in a Spanish company. Mr Al Sahoud and Saltai 2001 SL, who had not been parties to the original proceedings, applied to set the order aside. On 17 May 2018, Parker J held that the 2008 finding was not binding on them and discharged the receivership. The appeal concerned whether their non-party status and asserted ownership prevented enforcement.

Appeal allowed. The receivership order was restored. The consequential order requiring an application to discharge the Irish recognition order, and the costs orders in favour of the respondents, were set aside.

1. Non-joinder of a third party in the original financial remedy proceedings did not prevent later enforcement. Goldstone v Goldstone [2011] EWCA Civ 39 did not establish that every person asserting an interest must always be joined before a financial remedy order is made. Where a lump sum is enforced against assets found to be beneficially owned by the judgment debtor, the legal owners can be joined in the enforcement process.
2. The 2008 judgment was not binding on Mr Al Sahoud or Saltai, but that did not make it ineffective for enforcement purposes. Applying the principle in JSC BTA Bank v Ablyazov (No.15) [2016] EWCA Civ 987 and Re Norris [2001] UKHL 34, a third party becomes directly affected when enforcement is attempted against property it claims. It may intervene and seek determination of its rights. Mere assertion of ownership was insufficient to set aside the order; the asserted rights had to be established.
3. There was no general jurisdictional bar to appointing a receiver by way of equitable execution over foreign property. Masri v Consolidated Contractors International UK Ltd (No.2) [2008] EWCA Civ 303 confirmed that such an order has no proprietary effect, operates in personam against the judgment debtor, and must respect third-party rights. The receivership was enforcement of the 2008 order, not an action on the judgment, so section 24 of the Limitation Act 1980 and the Aldi Stores guidelines did not apply.
4. The estoppel arguments failed. The 2014 English judgment had not determined beneficial ownership, and the Spanish proceedings concerned appointment of an administrative receiver over the company rather than a receiver over the shares. Article 34(4) of Council Regulation (EC) No 44/2001 did not prevent recognition because there was no irreconcilable earlier judgment.
5. The judge was best placed to assess alleged non-disclosure. In light of the husband’s conduct, the without-notice order was justified.

The respondents remained free to apply to set aside the restored order, but only on the basis that their alleged beneficial rights were established.

• Court of Appeal (Civil Division) — On 20 December 2019, allowed the appeal and restored the receivership order.
• High Court of Justice, Family Division — On 17 May 2018, Parker J set aside the July 2017 receivership order and made consequential recognition and costs orders.
• High Court of Justice, Family Division — On 21 July 2017, Parker J appointed receivers over the relevant shareholdings without notice.