David Tyler Moss & Ors v Brian Martin & Anor

A passport impounding order under Senior Courts Act 1981 section 37 is an exceptional, ancillary measure. Although a real risk that a defendant will leave England and Wales and not return may be established, the order cannot continue unless the claimant also shows that the defendant’s absence will materially prejudice an existing or imminent court process.

The restraint must be proportionate, necessary to the effective performance of that process, and limited to the period required. It is not a freestanding means of enforcing a money judgment or exerting pressure on a judgment debtor. Speculative post-judgment enforcement difficulties will not ordinarily justify a lengthy and uncertain restriction where the claimant has not pursued available pre-trial disclosure or enforcement-related relief.

The claimants sued in England on substantial money judgments obtained in Texas against the defendants. A without-notice freezing order prevented the defendants from leaving England and Wales, required surrender of their passports, and permitted limited living expenditure.

The defendants applied to lift the passport restriction so that they could travel abroad, and to increase their permitted living expenses. The claimants contended that the defendants presented a flight risk and that their continued presence was needed for disclosure, alleged cryptocurrency assets, an alleged recent breach of the freezing order, and possible future enforcement.

The central issues were whether retaining the passports remained justified under section 37 of the Senior Courts Act 1981, and what variation of the living-expenses allowance was warranted.

1. The application was granted in part. The defendants’ passports were to be released after a short further period, for which the judge was minded to specify 30 September 2022, subject to submissions on timing. The monthly living-expenses allowance was increased from £1,800 to £2,000. The two requested one-off payments were refused.

2. A passport order is available under section 37 of the Senior Courts Act 1981 before or after judgment. Applying JSC Mezhdunarodny Promyshlenniy Bank v Pugachev [2015] EWCA Civ 1108, there was probable cause to believe that the defendants might leave the jurisdiction and not return. Their portable internet-based business, the first defendant’s limited UK connections, the messages concerning being judgment-proof, and the Texas findings provided an objectively assessed real risk.

3. That finding did not suffice. A passport order restricts personal liberty and must be exercised cautiously. It must be ancillary to an existing or imminent process that requires the defendants’ presence. As explained in B v B (Injunction: Jurisdiction) [1998] 1 WLR 329, it cannot operate as a freestanding means of enforcing a money judgment.

4. The original disclosure purpose had been substantially performed. The claimants had not pursued further disclosure, cross-examination, committal, or other relief concerning the disputed cryptocurrency. Nor had they identified any current process for which the defendants’ presence was required. The alleged closure of a YouTube channel was unresolved and the claimants had not decided whether to seek further relief. General and contingent post-judgment enforcement concerns were insufficient, particularly where available pre-trial steps had not been taken.

5. Accordingly, applying the proportionality considerations in Corbiere Limited v Xu [2018] EWHC 112 (Ch), continued retention was neither reasonable nor necessary and would be longer than required for its legitimate purpose. The claimants remained free to seek a fresh passport order if they made a properly supported application for relief whose effectiveness required it.

6. The evidence justified a modest increase for energy costs and general rises in living costs, but not the £500 sought. The energy-account debit was expected to be absorbed through the increased monthly allowance. The proposed £800 holiday expenditure was neither adequately particularised nor ordinarily permissible under a freezing order. The first defendant was directed to confirm by witness statement the information given through counsel about cryptocurrency held or traded in his own name.

This was a first-instance application in proceedings brought on Texas money judgments. The judgment records that an appeal from the second Texas judgment had been lodged but had not been determined.