Not on notice orders

Raja v Van Hoogstraten (No 9) CA TLR 4 February

In 2007 the intervener, Tombstone Ltd, had claimed damages from the claimant estate and its instructed firm of solicitors for trespass and conversion by sequestrators following the setting aside of a writ of sequestration which had extended to Tombstone’s assets. In the course of extensive litigation between a finding of contempt of court had been made against the defendant on the basis of his failure to comply with disclosure obligations contained in a freezing order. A writ of sequestration was issued in respect of defendant’s assets which, following a without notice application, was later amended to extend to all of Tombstone’s assets. The Court of Appeal held that the finding of contempt against the defendant had been wrongly made and set aside the sequestration order. Tombstone then made a number of claims against the claimant and joined the solicitors as a co-defendant. The judge found there had been an irregularity in obtaining the amended writ as because the claimant and the solicitors had failed to provide the judge prior to the hearing of the application to amend the writ with any papers or draft of the order sought. There had also been a crucial misstatement that the defendant was the beneficial owner of Tombstone and its assets. The misrepresentations and non-disclosures had been so culpable and serious as to entitle the court in the exercise of its discretion to deprive the claimant and the solicitors of the protection otherwise afforded by the court orders, however in the exceptional circumstances of the case, it would be unjust and oppressive to deprive them of the protection on which they had reasonably relied over a protracted period. It should have been plain to any competent lawyer that the amended writ had been irregularly obtained and on any prompt application would have been set aside. Since the writ had been amended on a without notice application, Tombstone could have applied for its discharge on a full merits hearing. On no basis could Tombstone be entitled to relief by way of damages where no arguable claim had been made out to any recoverable loss. The claim was dismissed in August 2007. Tombstone appealed.