September 02, 2022 court of first instance - Orders
Claim No. CFI 054/2019
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
LARMAG HOLDING B.V.
Claimant/Applicant
and
(1) FIRST ABU DHABI BANK PJSC
(2) FAB SECURITIES LLC
(3) MR ABDULLAH SAEED BAKHEET OBAID ALJABERI
(4) MR ALI MOHAMMED
(5) ELITE HOLDING GROUP LIMITED
Defendants/Respondents
ORDER WITH REASONS OF JUSTICE SIR RICHARD FIELD
UPON the Claimant’s Application No. CFI-054-2019/17 dated 13 September 2021 for an order that unless the Third Defendant complies within 7 days with the orders set out in the Corrected Judgment herein dated 30 August 2021 and other orders set out in the Notice of Application, then the Third Defendant’s purported Appeal Notice shall be struck out and he shall be debarred from taking any further part in these proceedings and any appeal in relation thereto (the “UOA”)
AND UPON consideration of the UOA
AND UPON consideration of the 4th, 5th, 6th and 7th Witness Statements of Mr Keith Lyall Hutchison
AND UPON considering the judgment herein dated 15 August 2021 (“the First Judgment”) and the judgment dated 30 August 2021 (the “Corrected Judgment”)
AND UPON considering the judgment dated 28 October 2021 on the Third Defendant’s application for a de novo review of the Registrar’s decision dated 23 September 2021
AND UPON considering the Third Defendant’s Appeal Notice dated 6 September 2021 and his Application No. CFI-054-2019/16 dated 9 September 2021 for permission to appeal out of time
AND UPON considering the Skeleton Arguments of the Claimant and the Third Defendant and the submissions made by those parties at the oral hearing held on 13 December 2021
AND UPON the Claimant’s Application No. CFI-054-2019/19 dated 16 September 2021 for the continuation of the post judgment worldwide freezing order with a return date of 25 October 2021 binding upon all the Third, Fourth and Fifth Defendants until the judgment dated 30 August 2021 is satisfied prohibiting the removal of assets up to the value of EUR 64,352,669 which are within Dubai or in any dealing with or diminishing the value of their assets outside Dubai up to the same value and ordering in paragraph 3 the provision of information as to their assets exceeding in value USD 10,000 (“PJWFOA”)
AND UPON consideration of the PJWFOA
AND UPON consideration of the Claimant’s Application No. CFI-054-2019/18 dated 14 September 2021 for the continuation until judgment of the Freezing Orders dated 21 and 24 November 2019
AND UPON consideration of the 2nd, 3rd, and 4th Affidavits of Mr Keith Lyall Hutchison
AND UPON considering the order dated 16 September 2021 granting a post judgment WFO with a return date of 25 October 2021
AND UPON considering the judgment dated 20 October 2021 given on the PJWFOA dated 16 September 2021
IT IS NOW HEREBY ORDERED THAT:
1. Unless the Third Defendant complies within 18 days of the date of this order with the obligations (other than the time limits) imposed in: (i) paragraph A (1) on page 73 of the Corrected Judgment herein dated 30 August 2021; (ii) paragraphs 2 and 3 of the order made herein dated 27 May 2021; (iii) paragraph 6 of the Passport Seizure Order made herein dated 3 August 2021, the Third Defendant’s Appeal Notice filed on 6 September 2021 and his Application Notice dated 9 September 2021 for permission to appeal out of time shall be struck out and he shall be debarred from taking any further steps in these proceedings and any appeal in relation thereto.
2. The Third Defendant must pay the Claimant’s costs incurred in the UOA to be assessed on the standard basis by a Registrar, if not agreed
3. The post judgment worldwide freezing order made herein dated 16 September 2021 will be continued without any return date until the Corrected Judgment herein dated 30 August 2021 is satisfied in full or earlier order of the Court.
4. The Third Defendant must pay the Claimant’s costs incurred in the PJWFOA to be assessed on the standard basis by a Registrar, if not agreed
Issued by:
Ayesha Bin Kalban
Deputy Registrar
Date of Issue: 2 September 2022
At: 10am
SCHEDULE OF REASONS
Introduction
1. After a trial of the claims brought by the Claimant (“Larmag”) against the Third Defendant (“Mr Aljaberi”) and the Fourth and Fifth Defendants, judgment was first entered against Mr Aljaberi on 15 August 2021 (the “First Judgment”) which judgment was replaced by a corrected version dated 30 August 2021 (the “Corrected Judgment”).
2. The Court held, inter alia, that: (i) Mr Aljaberi had fraudulently procured the transfer by Larmag of 70,000 EUR 1,000.00 Reditum SA Bonds (the “Reditum Bonds”) by free transfer into an account he held with the Second Defendant; (ii) in the course of achieving this transfer, Mr Aljaberi forged, or authorised the forging of documents purportedly issued by a reputable bank stating that a prepayment for the Reditum Bonds in the sum of EUR 20 million had been sent to Larmag’s bank account in Holland; (iii) Mr Aljaberi had given false evidence dishonestly knowing that it was false; and (iv) the deceit practised by Mr Aljaberi involved such grave dishonesty that he and those alleged to have been party to his fraud (the 4th and 5th Defendants) must pay the costs of the action on the indemnity basis.
3. The Court in its First and Corrected Judgments ordered in paragraphs A, B and C (pp 73 -74) that Mr Aljaberi must:
(a) forthwith give all necessary instructions and make all necessary arrangements for the transfer to the Claimant of the Reditum Bonds held in his account 47502 with the Second Defendant;
(b) within 14 days of the date of the judgment serve an affidavit exhibiting all relevant documents accounting for: (a) the 5000 Reditum Bonds transferred from his said account 47502 to Zoya Holding Limited (“Zoya”) and the sale by Zoya of 4000 of the said 5000 Reditum Bonds it received from the 3rd Defendant, disclosing the consideration received for the transfer to Zoya and the name of the transferee who received the said 4000 Reditum Bonds from Zoya and the consideration received by Zoya for that latter transfer and the identity of who controls Zoya;
(c) jointly and severally with the 4th and 5th Defendants pay to the Claimant: (a) a sum equivalent to such consideration as Zoya is found on the taking of the said account to have paid to the 3rd Defendant and/or 4th Defendant in respect of the said transfer of 5000 Reditum Bonds to Zoya; and (b) a sum equivalent to such consideration as is found on the taking of the said account to have been received by Zoya or the 3rd and/or the 4th Defendant for the sale of 4000 of the Reditum Bonds to a third party;
(d) procure the transfer to the Claimant of all of the Reditum Bonds that are found on the taking of the said account to remain within the disposition of Zoya;
(e) pay damages to Larmag, jointly and severally with the 4th and 5th Defendants:
(i) in the sum of EUR 57,711,500, in respect of the deceit practised by them that induced Larmag to transfer the Claimed Bonds into the 3rd Defendant’s account 47502 with FABS;
(ii) in the sum of EUR 6,512,887, in respect of the Claimant’s lost opportunity of increasing the value of its shareholding in LRE2 caused by these defendants’ deceitful misappropriation of the Claimed Bonds;
(iii) in the sum of EUR 113,350, in respect of the waste of management time caused by their wrongful deceitful conduct;
(iv) in the sum of EUR 14,982, in respect of the expenditure incurred by Larmag on a trip to Dubai to investigate the problems caused by the deceitful misappropriation of the Claimed Bonds;
(f) must pay interest jointly and severally with the 4th and 5th Defendants from 3 July 2018 on the sums herein awarded to the Claimant at the rate of Euribor plus 2%; and
(g) must pay jointly and severally with the 4th and 5th Defendants Larmag’s costs of the action to be assessed by the Registrar on the indemnity basis, if not agreed.
Mr Aljaberi has never complied with any part of the aforesaid order.
4. In the period 21 November 2019 down to 13 September 2021 (the date of the UOA), Mr Aljaberi was made the subject, inter alia, of the following orders:
(a) A worldwide freezing order dated 21 November 2019 in respect of assets of the value of up to EUR 7,181,506.81 both within and without of Dubai which also ordered in paragraph 3.1 thereof the Defendants (including Mr Aljaberi) within three working days of service of the order and to the best of their ability to inform Larmag’s legal representatives of all their assets worldwide exceeding USD 10,000 in value whether in their own name or not and whether sold or jointly owned giving the value location and details of all such outlets (“the Freezing Order”). An order dated 24 November 2019 amended the figure of EUR 7,181,506.81 in paragraphs 2.1(a), 2.4, 2.5 and 4.4(a) in respect of Mr Aljaberi to EUR 7,781,506.81. These two orders are referred to hereafter as the Freezing Order.
(By an order also dated 21 November 2019, Mr Aljaberi and the 4th and 5th Defendants were joined into the action pursuant to RDC 20.7 and on 12 December 2019, in purported compliance with paragraph 3.1 of the Freezing Order, Mr Aljaberi served his First Affidavit (the “First Aljaberi Affidavit”) in which he listed what he said were all his assets the value of each of which exceeded USD 10,000. However, he has failed to inform Larmag’s representatives of any subsequent changes to his asset position.)
(b) An order dated 27 May 2021 (the “Information Order”) that in paragraphs 2 and 3 ordered Mr Aljaberi within 7 days to inform Larmag’s solicitors in writing and provide copy documents where stated of:
(i) precise details regarding the source of the funds that the Third Defendant has been using to pay for his legal costs and his living expenses since the issue of the Freezing Order;
(ii) an updated list of all the Third Defendant’s assets worldwide exceeding USD 10,000 in value whether in his own name or not and whether solely or jointly owned, giving the value, location and details of such assets;
(iii) a comprehensive explanation regarding the current debts owed to the Third Defendant by third parties, including with respect to each debt, the identity of the individual debtor or other debtor entity who owns the debt, the amount of the debt, the current status of the debt, the ultimate due date for the date and the terms of any interest applicable;
(iv) a current valuation of Orxy Capital LLC and an explanation of how the company has been valued;
(v) the current status of the real property assets listed in the First Aljaberi Affidavit and, in particular, whether any of those assets have been sold, leased or pledged or otherwise encumbered since the date of the First Aljaberi Affidavit and, if so, to whom, when and for what consideration;
(vi) whether all of the real property assets listed in the First Aljaberi Affidavit are owned by the Third Defendant directly and, if not, a full explanation of how those assets are owned; and
(vii) a current valuation of all the real property assets listed in the First Aljaberi Affidavit and an explanation for how those valuations have been made.
Mr Aljaberi has never complied with these paragraphs 2 and 3 of the Information Order.
(c) An order dated 3 August 2021 (the “Passport Seizure Order”) that, inter alia, prohibited Mr Aljaberi from leaving the UAE until further order of the Court and additionally ordered:
(i) by paragraph 5, the Third Defendant and any other person served with this order not to (i) make any application for, (ii) obtain or seek to obtain and/ or knowingly cause, permit, encourage or support any steps being taken to apply for or obtain, any passport, identity card, ticket, travel warrant or other document which would enable the third defendant to leave the UAE; and
(ii) by paragraph 6, upon service of this order on him, the Third Defendant must identify and inform the Claimant’s legal representatives of the whereabouts of all his passports, including his UAE passport, and, as soon as is practicable, he must deliver all his passports up, or cause them to be delivered up, to the registry of the DIFC Court which will hold them in safe custody pending the further order of the court.
Mr Aljaberi has never complied with paragraph 6 of the Passport Seizure Order
(d) A further order dated 3 August 2021 (the “Amendment Order”) which replaced the list of assets to which the prohibition imposed by paragraph 2.3 of the Freezing Order was to apply.
(e) On 6 September 2021, a Notice of Appeal against the First Judgment was issued on behalf of Mr Aljaberi that pleaded the following grounds:
The DIFC Court does not possess jurisdiction to hear the dispute between the Claimant and the Third Defendant because it did not arise from:
(i) A civil or commercial claim or action to which the DIFC, or any DIFC Body, Establishment or Licensed DIFC Establishment is a party; or
(ii) a contract or promised contract, whether partly or wholly concluded, finalised or performed within the DIFC or to be performed or was supposed to be performed within the DIFC pursuant to express or implied terms stipulated in the contract; or
(iii) a civil or commercial claim or action arising out of or relating to any incident or transaction which had been wholly or partly performed within DIFC or was related to DIFC activities; or
(iv) an appeal against any decision or procedure made by the DIFC Bodies where DIFC Laws and DIFC Regulations permit such appeals; or
(v) any claim or action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations.
5. On 9 September 2021, a Notice of Application for an extension of time of one day to appeal the First Judgment was filed on behalf of Mr Aljaberi.
6. On 16 September 2021 the Court made a post judgment WFO with a return date of 25 October 2021 that was to operate until the Corrected Judgment was satisfied in full or earlier order of the Court against the Third, Fourth and Fifth Defendants prohibiting until the return date or further order the removal of assets up to the value of AED 64,352,669 which are within Dubai or in any dealing with or diminishing the value of their assets outside Dubai up to the same value and ordering in paragraph 3 the provision of information as to the Defendants’ assets exceeding in value USD 10,000.
7. The two applications before the Court were heard together on 13 December 2012 following which judgment was reserved and the order dated 16 September was continued until judgment on the PJWFOA.
Larmag’s case in support of its two applications
The UOA
8. In respect of the UOA, Larmag contended that Mr Aljaberi was in contumelious contempt of court in failing to comply with the orders identified in paragraphs (3) and (4) above and that it should exercise its discretion to make the unless order sought. In support of this overarching contention, Larmag submitted that compliance with court orders is fundamental to the rule of law even if a party disagrees with the order or alleges that the court did not have jurisdiction to make it. This has long been the position taken in the authorities. The principle was stated authoritatively in England in Chuck v Cremer (1846) 1 Coop temp Cott 338 where the Lord Chancellor, Lord Cottenham, said at pp 342-343:
“A party, who knows of an order, whether null or valid, regular or irregular, cannot be permitted to disobey it it would be most dangerous to hold that the suitors, or their solicitors, could themselves judge whether an order was null or valid - whether it was regular or irregular. That they should come to the Court and not take upon themselves to determine such a question. That the course of a party knowing of an order, which was null or irregular, and who might be affected by it, was plain. He should apply to the Court that it might be discharged. As long as it existed it must not be disobeyed.”
9. In R (Majera) v Secretary of State for the Home Department [2021] UKSC 46, Lord Reed, after quoting Lord Cottenham’s well known dictum in Chuck v Cremer, said at [45] :
“Three important points can be taken from this passage. First, there is a legal duty to obey a court order which has not been set aside: “it must not be disobeyed”. As the mandatory language makes clear, this is a rule of law, not merely a matter of good practice. Secondly, the rationale of according such authority to court orders, as explained in the second and third sentences, is what would now be described as the rule of law. As was said in R (Evans) v Attorney General (Campaign for Freedom of Information intervening) [2015] UKSC 21; [2015] AC 1787, para 52, “subject to being overruled by a higher court or (given Parliamentary supremacy) a statute, it is a basic principle that a decision of a court is binding as between the parties, and cannot be ignored or set aside by anyone, including (indeed it may fairly be said, least of all) the executive”. This principle was described (ibid) as “fundamental to the rule of law”. Thirdly, as the Lord Chancellor made clear in Chuck v Cremer, the rule applies to orders which are “null”, as well as to orders which are merely irregular. Notwithstanding the paradox involved in this use of language, a court order which is “null” must be obeyed unless and until it is set aside.”
10. Larmag also points out that Lord Reed said in R (Majera) that: (i) the Chuck v Cremer principles apply not only to a court of unlimited jurisdiction but also to courts of limited jurisdiction, like the DIFC Courts, whose jurisdiction is based on statute1 ; and (ii) a court order must be complied with unless and until it is set aside, even if it is made in excess of jurisdiction2 . This last point is illustrated by the DIFC Court of Appeal’s judgment in Credit Suisse (Switzerland) Limited v Goel [2020] DIFC CA 004 (4 October 2020) where it was stated;
“The CFI has a preliminary jurisdiction to determine whether it has jurisdiction. As an incident of that preliminary jurisdiction it may in an appropriate case, grant interim relief to preserve the status quo pending the determination of its jurisdiction.”
11. Larmag relies on the widely known passage in the judgment of Denning LJ in Hadkinson v Hadkinson [1952] P 285 at 298 and cites a number of more recent decisions where it was recognised that an alleged contemnor can be obliged to purge his contempt before he can appeal the order he has breached, including X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1; Arab Monetary Fund v Hashim [1997] EWCA Civ 1296; Lexi Holdings v Luqman [2007] EWCA Civ 1501; and JSC BTA Bank v Ablyazov No 3 [2010] EWHC 2219 (QB).
12. Larmag quotes this key part of the passage in Denning LJ’s judgment in Hadkinson :
“… the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.”
The PJWFOA
13. Larmag repeats the submissions that the Court accepted when making the post judgment WFO order and disclosure order on 16 September 2021 with a return date of 25 October 2021 that was to operate until the Corrected Judgment was satisfied in full or earlier order of the Court prohibiting the Third, Fourth and Fifth Defendants until the return date or further order from removing any of their assets up to the value of AED 64,352,669 which are within Dubai or in any way dealing with or diminishing the value of their assets outside Dubai up to the same value and ordering in paragraph 3 the provision of information as to the Defendants’ assets exceeding in value USD 10,000.
14. In brief, those submissions were:
(a) Mr Aljaberi was in breach of all the orders made in the Corrected Judgment and in breach of several of the previous orders made against him including the Information Order, the Passport Seizure Order and the Amendment Order. He had also been found to have acted with grave dishonesty in defrauding Larmag of the Reditum Bonds.
(b) The following guidance given by DCJ Chadwick as to the grant of post-judgment freezing orders in Bocimar International NV v Emirates Trading Agency LLC [2015] DIFC CFI 008 (28 January 2016) was applicable.
(i) Recognition should be given to the fact that the applicant now had a judgment debt against the respondent and not just a claim with a reasonable prospect of success.
(ii) The applicant must establish there is a sufficient risk of dissipation by the respondent of his assets.
(iii) On the question of sufficient risk of dissipation, the court can have regard to the respondent’s previous conduct in the litigation.
(c) The Court should have regard to the principles developed by the courts of England and Wales in regard to post-judgment freezing orders. These are:
(i) The court will more readily grant a freezing injunction as an aid to enforcement of a judgment that has been entered than on an interim application: Babanaft International Co SA v Bassatne [1990] Ch at p.37.
(ii) It is sufficient for the grant of relief that there is a real risk that the judgment will remain unsatisfied if injunctive relief is refused: Masri Consolidated Contractors International Co SAL [2008] EWHC 2492 (Comm) at [34] per Tomlinson J.
(iii) The Court will be less concerned with issues relating to the supposed harm that a freezing order might cause to the defendant. For example, in Masri, Tomlinson J held at [35] that an “ordinary course of business” exception was inappropriate in the post judgement environment.
(iv) The injunction must be sought for a legitimate purpose (namely the process of ultimate collection of the debt) and there must therefore be some prospect that the injunction will aid the judgment creditor in execution (as opposed to place illegitimate pressure on him): Masri at [34] per Tomlinson J.
Mr Aljaberi’s case
The UOA
15. I summarise Mr Aljaberi’s written submissions in which he refers to himself as D3 as follows:
(a) D3 cannot be prevented from exercising his legal right to appeal the Corrected Judgment based on its alleged non-compliance with various orders. If granted, the debarring and strike out orders sought by the Claimant under the Unless Application will be against the interest and administration of justice by this Court. D3’s access to justice would be significantly impaired if he is prevented from exercising its right to appeal the Corrected Judgment, particularly since he has faced difficulties to obtain adequate legal representation in light of the existing Freezing Order and the Corrected Judgment against him.
(b) In weighing the significance of the legal right to appeal against the Claimant’s complaints regarding the alleged non-compliance with Court orders, the Court must consider the serious adverse consequences which D3 will suffer against the benefit the Claimant may obtain from being granted the orders sought. The Claimant stands to gain nothing from the orders it is seeking against D3. And any interest the Claimant may have in obtaining the debarring and strike out orders should be considered minor in light of the serious adverse effect that D3 will suffer as a consequence.
(c) Having regard to the approach set out by Denning LJ in Hadkinson v Hadkinson [1952] P 285 at 298, the alleged non-compliance with orders does not give rise to a continuing risk of injustice to the Claimant, and neither does it affect the fairness of any trial. The Claimant has secured a judgment in its favour against D3, and as such there is no basis for a continuing risk of injustice that adversely affects the Claimant’s rights.
(d) The discretion the Court has whether to grant the application or refuse it, recognised in X Ltd Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1, should be exercised in D3’s favour because the Claimant has failed to establish any reason or basis to deny his right and access to appeal. As stated in Morgan-Grampian by Lord Oliver at 50:
“First, it is suggested that to decline to hear an appellant who is in contempt infringes the maxim "audi alteram partem" which lies at the root of every civilised system of law. A person whose very liberty is threatened by an order made against him ought, it is said, to have an absolute right to appeal against the very order that has put him in contempt. For my part, I think that this is too facile an analysis. The maxim "audi alteram partem" means not that a party has an absolute right in all circumstances to be heard in his own defence but that he must be given a proper opportunity to be heard.”
(e) The alleged non-compliance with orders relating to the Freezing Order, cannot amount to an abuse of process of this Court in circumstances where D3 continues to face difficulties with regard to being appropriately represented before this Court as a result of the Corrected Judgment and the Freezing Order. As a litigant in person, D3 has struggled to represent himself, and to consider or act on various applications that the Claimant has filed against it. These difficulties were consistently triggered by the actions taken by the Claimant in these proceedings.
(f) The scope of the disclosure orders has been unnecessarily widened by the Claimant in a manner that is disproportionate to the Corrected Judgment and in so acting the Claimant has abused the process of this Court and adversely influenced the fairness and due process of these proceedings.
(g) It is premature to consider the prospects of success of D3’s appeal against the judgment in circumstances where D3 is incapable of maintaining proper legal representation to advise on the same and various other steps that it intends to take to challenge the orders made against him.
It is to be noted that Mr Aljaberi’s name appeared at the end of his skeleton argument although the metadata of the Word version of this document showed that the document had been authored by a person named Noran Almeklafti.
16. Mr Aljaberi’s oral submissions advanced at the hearing may be summarised as follows.
(a) The orders sought by Larmag should not be granted because so far Larmag has not established a right to enforce the Corrected Judgment in Abu Dhabi.
(b) Everything involved in this case had happened in Abu Dhabi and he had only become aware a month ago that the DIFC Court claimed jurisdiction and he had only just learned how a litigant in person can respond to applications for orders.
(c) He had been unable to obtain legal representation after Bird & Bird came off the record because his account with the First Defendant had been frozen in respect of the judgment debt of EUR 64,400,000. No lawyer would represent him unless he paid a sum in advance which he had been unable to do. He had had help from a lawyer in the preparation of his written skeleton argument.
(d) He had been unable to hand over his passport because this required a special Abu Dhabi procedure and he had been unable hand over the bonds because the account holding them was frozen. As to this last matter, the First Defendant had earlier intimated that if he gave instructions for the bonds to be transferred it would make the transfer.
(e) He thought he would have an opportunity to reply at the trial to the allegations made against him and was shocked when he was unable to do so.
The PJWFOA
17. Mr Aljaberi submitted that this application should not be granted unless and until his appeal based on lack of jurisdiction had been heard and dismissed.
18. Mr Aljaberi also contended that there is no justification for the scope of the Freezing Order: the Claimant is not at risk.
19. The oral submissions summarised in paragraph (16) are relevant also to the PJWFOA.
Discussion
20. I readily adopt the guidance and statements of principle given in the decisions of the Courts of England and Wales referred to above in paragraphs (8) – (12) above.
21. I think it instructive to trace the acceptance of Denning LJ’s approach in Hadkinson in preference to the approach taken by the other members of the Court in that appeal, Romer and Somervell LJJ.
22. In Hadkinson the appellant was a mother who had taken her son out of the jurisdiction to Australia in breach of a direction following her divorce from her husband that she would have custody of her son but he was to stay within the jurisdiction. On 29 May 1952 on the application of the father, the Court ordered that the son must be returned to the jurisdiction not later than August 31, 1952. On an appeal by the mother against that order, counsel for the father took the preliminary objection that the appeal should not be heard because the mother had been at all times, and still was, in contempt having taken the son to Australia.
23. Romer and Somervell LJ stated that the starting point was that there was a rule that anyone in breach of an order of the court must purge his or her contempt before being allowed to appeal the order in question. There were two exceptions to that rule. A party could apply to purge his contempt and a party alleged to be in contempt could appeal with a view to set aside the order upon which the alleged contempt was founded. Here the mother was not within either of these exceptions because she was not appealing the original order but against the ancillary order obtained by the boy’s father.
24. Denning LJ, whilst agreeing that the mother should be debarred from appealing the order, formulated a different approach. The full statement of the principle he advocated reads as follows:
“It is a strong thing for a court to refuse to hear a party to a cause itself impedes the course of justice and there is no other and it is only to be justified by grave considerations of public policy. It is a step which a court will only take when the contempt itself impedes the course of justice and there is no other effective means of securing his compliance. In this regard I would like to refer to what Sir George Jessel M.R. said in a similar connexion in In re Clements, v. Erlanger 25: " I have myself had" on many occasions to consider this jurisdiction; and I have" always thought that, necessary though it be, it is necessary" only in the sense in which extreme measures are sometimes necessary to preserve men's rights, that is, if no other pertinent remedy can be found. Probably that will be discovered after consideration to be the true measure of the exercise of the jurisdiction." Applying this principle I am of opinion that the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.”
25. In The Messiniaki Tolmi [1981] 2 Lloyd’s Rep 595, there were proceedings for contempt brought by sellers against buyers in respect of a breach of an order of the Court. The lead judgment was given by Brandon LJ who adopted the approach taken by Romer and Somervell LJJ in Hadkinson that a party alleged to be in contempt who challenged the order that he was alleged to have breached was within an exception to the general rule that a contemnor cannot be heard unless he has purged his contempt. However, Brandon LJ went on to express the qualification that there may be cases where an appeal by a party in contempt against the very order disobedience of which put him in contempt, can be shown to be, for one reason or another, an abuse of the powers of the Court.3
26. The first part of the headnote of the report of X Ltd v Morgan-Grampian (Publishers) Ltd and others [1991] 1 AC 1 reads (save for the final sentence) as follows:
“A confidential document concerning the financial affairs of the plaintiffs, two private companies, was wrongfully removed from their premises and its contents disclosed to G., a journalist, who promised not to reveal the identity of his informant. In order to take action against the informant and to prevent further disclosure the plaintiffs sought injunctive relief to restrain the third defendant, G., and the first and second defendants, the publishers of the journal on which he worked and his employers, from publishing the information so disclosed, and to require them to deliver up notes made by G. which, they hoped, would reveal the identity of the informant and enable them to recover the missing document. The judge granted the orders sought … G. indicated that he was unwilling to comply with the disclosure order and on his application for a stay pending appeal, the Court of Appeal varied the order to enable him, if he preferred, to lodge the notes, with appropriate verification, with the court in a sealed envelope until final determination of his appeal. G … refused to comply with the order either in its original form or as varied. On the plaintiffs' motion for his committal, the judge found him guilty of contempt of court. On the defendants' appeals against the order for disclosure the Court of Appeal held that, in view of G.'s refusal to comply with the court's order and his rejection of its authority, the court would, while not dismissing his appeal in limine, exercise its discretion so as to refuse to hear argument in support of it.”
The Court of Appeal dismissed the defendants' appeals which decision was challenged on appeal to the House of Lords.
27. Lord Bridge gave the leading judgment on the appeal. Having cited the passage in Denning LJ’s judgment in Hadkinson quoted in paragraph (24) above, he said:
“I cannot help thinking that the more flexible treatment of the jurisdiction as one of discretion to be exercised in accordance with the principle stated by Denning L.J. better accords with contemporary judicial attitudes to the importance of ensuring procedural justice than confining its exercise within the limits of a strict rule subject to defined exceptions. But in practice in most cases the two different approaches are likely to lead to the same conclusion, as they did in Hadkinson itself and would have done in The Messiniaki Tolmi [1981] 2 Lloyd's Rep. 595. Certainly, in a case where a contemnor not only fails wilfully and contumaciously to comply with an order of the court but makes it clear that he will continue to defy the court's authority if the order should be affirmed on appeal, the court must, in my opinion, have a discretion to decline to entertain his appeal against the order.“
28. Lord Oliver said4 :
“My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Bridge of Harwich with which I agree. Your Lordships have had the D benefit of very full submissions from counsel and it is only in deference to those arguments that I venture to add a few words of my own on three aspects of the appeal.
First, it is suggested that to decline to hear an appellant who is in contempt infringes the maxim "audi alteram partem" which lies at the root of every civilised system of law. A person whose very liberty is threatened by an order made against him ought, it is said, to have an absolute right to E appeal against the very order that has put him in contempt. For my part, I think that this is too facile an analysis. The maxim "audi alteram partem" means not that a party has an absolute right in all circumstances to be heard in his own defence but that he must be given a proper opportunity to be heard. So long as that opportunity is given upon terms with which the proposing appellant can reasonably comply, there is not and there p should not be any impediment in principle to the imposition by the court of proper conditions which require to be complied with before the appeal is heard. It is no denial of justice, for instance, to strike out the pleading of a litigant who contumaciously fails to comply with interlocutory orders, so that the action goes by fault, or to impose a condition of bringing money into court as the price of giving leave to defend or even, in an appropriate case, of appealing. So I cannot, for my part, see why it should be considered a denial of justice to make it a condition of appealing that a litigant subject to an order should, before appealing, comply with the order to an extent which does not compromise his position in the event of his appeal succeeding. Whilst, therefore, there must clearly be a strong indication in favour of preserving a litigant's right to appeal, even though he may be in contempt of court, I am in entire agreement with my noble and learned friend Lord Bridge of Harwich in thinking that there must also be a discretion to refuse to hear the contemnor and in favouring the flexible approach suggested by the judgment of Denning L.J. in Hadkinson v. Hadkinson [1952] P. 285. One can, of course, envisage, as he did in that case, circumstances in which the court would be unlikely to exercise its discretion in favour of hearing a contemnor—he instanced the case of an abuse of the process or of disobedience to the order impeding the course of justice—but I would not be in favour of laying down any rules for the exercise of discretion, though it can do no harm to give examples which may serve as guidelines. For instance, where the appeal is grounded on an alleged lack of jurisdiction to make the order at all, it would seem, in general, right that the contemnor should be heard. At the other end of the scale, if the contempt consisted of a contumacious refusal to reveal the whereabouts of a ward of court, it would be likely to require a strong case before the court would consider entertaining a contemnor's appeal.”
29. Moving on to more recent times, Denning LJ’s approach was accepted and applied by the EWCA in Arab Monetary Fund v Hashim and another [1997] EWCA Civ 1298. Here Chadwick J (as he then was) held on an application for committal that the 1st Defendant Dr Hashim was in contempt having: (i) broken a Mareva injunction in a number of ways; (ii) failed to provide documents in compliance with an order for discovery; (iii) attempted to frustrate the effect of an order of authority he had been directed to sign; (iv) refused to obey an order requiring him to disclose information and documents concerning certain offshore trusts and companies; and (v) continued to be in contempt, the effect of which was to deny the Claimant the effective relief sought in the action.
30. After having cited, inter alia, those parts of the judgments of Denning LJ in Hadkinson and Lord Bridge and Lord Oliver quoted above, Lord Bingham, the Lord Chief Justice, said:
“From those speeches it is, I think, clear that it is wrong to take as a starting point the proposition that the court will not hear a party in contempt and then to ask if the instant case falls within an exception to that general rule. It is preferable to ask whether, in the circumstances of an individual case, the interests of justice are best served by hearing a party in contempt or by refusing to do so, always bearing in mind the paramount importance which the court must attach to the prompt and unquestioning observance of court orders.
Dr Hashim has not appeared personally or by counsel to resist this application. But he did swear an affidavit on 2 December 1996 to which certain documents were exhibited and which we have read. I have, for my part, reached the clear conclusion that the court should decline to hear Dr Hashim on his appeal.”
The judge found that he had broken a number of orders quite deliberately and knowingly. These were serious contempts, as evidenced by the penalty which the judge imposed. In the view of the judge these contempts constituted a "pattern of persistent disobedience. Most seriously, the contempts were designed to deny the AMF the lawful fruits of its judgment. The contempts are continuing to this day. There has been no attempt to purge, nor to obey the orders, nor to promise compliance. It is obvious that the AMF cannot track down its stolen assets until it knows where they are. Dr Hashim's conduct is aimed at preventing the AMF doing that and he has so far been extremely successful. It would, in my judgment, be contrary to law, justice and common sense that a man who has shown himself willing wantonly to abuse the process of the court should be permitted to invoke that same process for his own ends. I would deny him that right and would accordingly strike out his appeal.”
31. In JSC BTA Bank v Ablyazov No 3 [2010] EWHC 2219 (QB), in the context of an application for an unless order debarring the respondents from defending the claim and entitling the claimant to enter judgment unless certain information and documents were provided, Christopher Clarke J considered what weight was to be given to the fact that there was a pending challenge to jurisdiction.
“38. In my judgment if the court makes an order for disclosure for information or documents it is entitled, in the event of non-compliance, to order that if such non-compliance is persisted in the claimant will be at liberty to enter judgment. Were it otherwise, in many cases the order would be without effect. The making of such an order is of course a discretionary exercise. It is necessary in a case such as this, where there is a challenge to the jurisdiction and to the making of a freezing order, carefully to consider whether or not it is right to require the immediate production of information given the prospect that the court may later hold that jurisdiction should not have been exercised or that the freezing order should not have been made. It is plain from Grupo Torras that it is open to the court to make an order for the production of information even during the pendency of a challenge to the jurisdiction. If that be so it must, as it seems to me, follow that it is open to the court to impose a sanction for non-compliance as a means of securing compliance.
39. Mr Colton submits that the present application is novel because it seeks to obtain judgment (or a debarring which has the same effect) before the jurisdiction challenge is determined or the application to set aside the freezing order is heard. This seems to me something of a mischaracterisation. The application seeks, essentially, compliance with the court's order for which the "unless" provision is intended as a sanction. The court expects its orders to be obeyed by those who are subject to them. The relevant prejudice to be considered is, therefore, that which would accrue to the respondents if the order sought was complied with and it subsequently turns out that the court has no jurisdiction or that the freezing order should not have been made. In that event the respondent will have suffered the invasion of their privacy constituted by the provision of information which they were not compellable to provide. In any event, the making of an order such as that sought is not entirely novel: see Mellon Trust.
47. Then it is said that an "unless" order should not be made if it would render nugatory the respondents' jurisdictional challenge. The order proposed would not do so. If the challenge succeeds, the action will not continue. What the order will do is require the production of information before the challenge is determined and, if it is obeyed, will foreclose the possibility of the respondents avoiding providing information because the jurisdiction is successfully challenged before the order is obeyed.
50. I also regard it as relevant to take into account the likelihood of the jurisdiction challenge succeeding …”
32. An example of a court imposing the severe sanction of a strike out unless the respondent makes disclosure as to his assets pursuant to an order of the court is provided by Lexi Holdings v Luqman [2007] WCA Civ 15015 where the Court of Appeal (Mummery and Chadwick LJJ), having found that respondent’s previous assertions as to his assets were “incredible,” imposed the following unless order:
"Unless the Respondent complies in full with the obligations contained in paragraphs 11 and 12 of the order of Mr Justice David Richards herein dated 13 November 2006 within 14 days of the date of this order the Defence of the Respondent be struck out and he be debarred from defending these proceedings further."
Decision
The UOA
33. In my judgment, Mr Aljaberi’s failure to comply with the orders set in paragraphs 3 and 4 (2), (3) and (4) above amounts to a contumelious, wilful and gross contempt of court. As were the contempts in Arab Monetary Fund v Hashim, Mr Aljaberi’s contempts were designed to deny Larmag the lawful fruits of its judgment and in the language of Denning LJ they have made “it more difficult to enforce the orders [the Court] may make”.
34. I reject Mr Aljaberi’s submission that he should not be found to have abused the process of the Court given his lack of legal representation. The freezing orders to which he was subject permitted him to spend a reasonable sum on legal advice and representation. He was represented by Bird & Bird, a well known and highly reputable firm of solicitors, and a well respected and highly reputable Leading Counsel from 28 December 2019 until 8 June 2021. Mr Lucas Pitts of Bird & Bird stated in a witness statement dated 4 March 2021 that he was instructed by Mr Aljaberi that he had been unable to rely on the liberty to spend a reasonable sum on legal representation because of the manner in which the Second Defendant had operated the freezing order. It is a mystery why Mr Aljaberi should have applied for funding to the Second Defendant rather than the First Defendant which held a number of his accounts, whereas the Second Defendant merely operated the account in which the Reditum bonds were held. It is also the case that Mr Aljaberi had the benefit of an order I made on 28 October 2021 granting him the liberty within 8 days to instruct a legal representative qualified to appear in the DIFC Courts to act solely in the UOA proceedings who within those 8 days swore an affidavit confirming Mr Aljaberi’s instructions. However, Mr Aljaberi failed to appoint such a representative notwithstanding the legal expenses carve-out in the freezing injunctions.
35. It is also the case that Mr Aljaberi is an intelligent individual who speaks and reads English to a standard which would enable him to understand the importance of the orders made against him and the proceedings arising out of the UOA and the PJWFOA.
36. I also reject Mr Aljaberi’s submission that the orders freezing his accounts with the First and Second Defendants has prevented him with complying with orders made in the First Judgment and the Corrected Judgment.
37. On the evidence before the Court, I do not regard the fact that Mr Aljaberi wishes to appeal the First Judgment and the Corrected Judgment (and implicitly the many orders made against him) on the ground that the Court lacked jurisdiction to determine the claim brought against him by Larmag is an obstacle to the grant of an unless order of the sort for which Larmag applies. The DIFC Court of Appeal upheld my ruling that the CFI had jurisdiction over the First and Second Defendants under Article 5(A)(1)(a) of the Judicial Authority Law. As recorded above, on 21 November 2019, Mr Aljaberi was joined in to the proceedings as a defendant under RDC 20.7, which provides:
“The Court may order a person to be added as a new party if:
(1) it is desirable to add the new party so that the Court can resolve all the matters in dispute in the proceedings; or
(2) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the Court can resolve that issue.”
38. Previously, on 13 March 2019, the DIFC Court of Appeal had held in Nest Investments Holding Lebanon Lebanon SAL v Deloitte & Touche (ME) [2018] DIFC CA 011 that RDC 20.7 is a “DIFC Regulation” that confers jurisdiction for the purpose of Article 5(A)(1) (e) of the Judicial Authority Law.
39. Mr Aljaberi has not put forward any submissions as to why neither of the sub-paragraphs 1 and 2 of RDC 20.7 applied to him rendering it desirable to add him as a party.
40. RDC 12.5 provides:
“If the defendant files an acknowledgment of service and does not make an application disputing the Court’s jurisdiction within the period specified in Rule 12.4 [14 days after filing an acknowledgment of service]:
(1) he is to be treated as having accepted that the Court has jurisdiction to try the claim;”
41. Mr Aljaberi filed an acknowledgement of service on 4 December 2019, six days after he had engaged Bird & Bird. On the return date for the Freezing Order on 18 December 2019, Mr Aljaberi was represented by Leading Counsel who sought to reserve Mr Aljaberi’s right to challenge the order at a future date without having to show a change of circumstances. Mr Aljaberi neither consented to nor opposed the continuation of the injunction.
42. Mr Aljaberi’s Notice of Appeal against the First Judgment on the ground of lack of jurisdiction was filed on 6 September 2021, some 10 months after filing the acknowledgement of service, during which period the trial took place and the First and the Corrected Judgments were handed down without any suggestion that the Court lacked jurisdiction.
43. Given the circumstances related in paragraphs (37) to (42) above, it has to be said that the prospects of success of Mr Aljaberi’s challenge to the jurisdiction are decidedly bleak.
44. It is true that Lord Oliver said in Morgan-Grampian Publishers that where the appeal against the order alleged to have been breached is grounded on an alleged lack of jurisdiction to make the order at all, it would seem, in general, right that the contemnor should be heard. But he was not here laying down a hard and fast rule, hence the words “it would seem, in general…”). Further, these words were used in a case where an order for committal had been made against the appellant Goodwin whereas in the instant case, although Larmag justifiably contends that Mr Aljaberi is in contempt of court, he is not facing committal proceedings.
45. Subject to considering the consequences for each of the parties if the order sought by Larmag be granted, the unless order I am minded to make in the light of Mr Aljaberi’s contumelious, wilful and gross contempts of court is that unless Mr Aljaberi complies within 18 days with the obligations (save for the time limits) specified in the following paragraph made in the Corrected Judgment and the following paragraphs in the following orders, Mr Aljaberi’s Appeal Notice issued on 6 September 2021 and his Application Notice for permission to appeal out of time issued on 9 September 2021 (CFI 054/2019/16) shall be struck out and he shall be debarred from taking any further steps in these proceedings and any appeal in relation thereto:
(a) Paragraph A, page 73 of the Corrected Judgment (see paragraph 3 above).
(b) Paragraphs 2 and 3 of the Information Order dated 27 May 2021 (see paragraph 4 (2) above).
(c) Paragraph 6 of the Passport Seizure Order dated 3 August 2021 (see paragraph 4 (3) (b) above.
46. It will be noticed that none of these orders requires the payment of money to Larmag. If the unless order is made and complied with by Mr Aljaberi and, against considerable odds, Mr Aljaberi succeeds in obtaining permission to appeal out time and succeeds on his proposed appeal founded on lack of jurisdiction, he will be out of pocket but not by very much and will be entitled to a costs order in his favour against Larmag about which company there is no suggestion of financial weakness. On the other hand, if the order is made and complied with but Mr Aljaberi’s application for permission to appeal out of time fails or, if permission having been granted, his appeal is dismissed, Larmag will have the very real advantage of the enforcement of the remedial orders made in paragraph A, page 73, of the Corrected Judgment and will have received valuable information in aid of enforcement of the Corrected Judgment.
47. In my judgment, in light of: (a) the gravity of Mr Aljaberi’s failures to comply with the orders identified above; (b) the impact of these failures on the enforcement by Larmag of the Corrected Judgment and the difficulty they pose to the enforcement generally of orders of the court; (c) the poor prospects of success that Mr Aljaberi’s ground of appeal based on lack of jurisdiction has; and (d) the consequences for each side if the postulated unless order is granted, I shall make an unless order in the terms contemplated in paragraph (45) above.
The PJWFAO
48. In my judgment, Larmag has satisfied the burden of persuading the court to continue the 16 September 2021 post judgment WFO until the Corrected Judgment is satisfied in full or earlier order of the Court.
49. I do not repeat here the reasons I gave in my judgment dated 20 October 2021 for granting the 16 September 2021 post judgment WFO with a return date of 25 October 2021. Nothing has caused me to depart from the view I had when making that order that the evidence reveals a real risk that Mr Aljaberi would dissipate his assets to prevent enforcement against them in execution of the Corrected Judgment if he were not restrained from so doing. It is also unnecessary to repeat at any length my reference in that earlier judgment to the decision of DCJ Chadwick in Bocimar International NV v Emirates Trading Agency LLC [2015] CFI 008 (28 January 2016) and the principles developed by the courts England and Wales in regard to post-judgment freezing orders.
50. I am also of the view that Mr Aljaberi’s proposed appeal against the Corrected Judgment on the ground of lack of jurisdiction constitutes no reason for refusing to continue the earlier order with no return date. I say this because it is trite law that the CFI has a preliminary jurisdiction under which it may, without finally determining the question of jurisdiction, grant interim relief (see Credit Suisse (Switzerland) Limited v Goel [2020] DIFC CA 004 (4 October 2020). It is also the case, as I have said above, that the prospects of success of Mr Aljaberi’s challenge to the jurisdiction are decidedly bleak.
51. Accordingly, Larmag’s PJWFOA succeeds.
