Adam Robert Giaquinto & Ors v ITI Capital Ltd
[2023] EWHC 2467 (KB)
Sanita Limited v Rare Art (London) Ltd
6 April 2023
[2023] EWHC 807 (Ch)
High Court
One company sued another. The judge ordered the losing company to pay a deposit to ensure it could pay court costs if it lost. The losing company appealed, but lost the appeal. The winning company also got a court order to freeze the losing company's assets to ensure the payment of costs. The losing company still has a chance to pay the deposit before its assets are seized.
Key Facts
- •Santina Limited (Seychelles-domiciled) sued Rare Art (London) Ltd for misrepresentation regarding the sale of silver-gilt soup tureens (£181,500).
- •Rare Art applied for security for costs, which Deputy Master Glover granted (£130,000). Santina failed to pay, leading to a trial vacation.
- •Santina appealed Deputy Master Glover's order. Rare Art then obtained an ex parte worldwide freezing order (£200,000) from Edwin Johnson J, including the tureens.
- •The court heard arguments on the appeal and the freezing order.
- •The case involved substantial costs exceeding the value of the tureens.
Legal Principles
Appeals against discretionary orders can only succeed if the lower court was 'plainly wrong'.
Dhillon v. Asiedu [2012] EWCA Civ 1020 at [33(d)]
Applications for security for costs should be made promptly, allowing sufficient time for compliance.
Hniazdzilau v. Vajgel [2015] EWHC 1582 (Ch) at [28]; Prince Radu of Hohenzollern v. Houston [2006] EWCA Civ 1575
On ex parte applications, full and frank disclosure of all relevant matters, including adverse ones, is required.
Fitzgerald v. Williams [1996] QB 657 (CA); Memory Corporation plc v. Sidhu (No 2) [2000] 1 WLR 1443 (CA)
Freezing orders prevent asset dissipation to avoid unsatisfied judgments; a good arguable case and risk of unsatisfied judgment are required.
McGrath, Commercial Fraud in Civil Practice, 2nd ed (2014); Gee, Commercial Injunctions, 7th ed (2021); Siskina v. Distos Compania Naiera SA [1979] AC 210; Veracruz Transportation Inc v. VC Shipping Co Inc [1992] 1 Lloyd’s Rep 353; Jet West Ltd v. Haddican [1992] 1 WLR 487; Cooke and Cooke v. Venulam Property Investments Ltd [2013] EWHC 4288 (Ch)
A costs order, even a contingent one, can found jurisdiction for a freezing order to prevent the thwarting of court orders.
Jet West Ltd v. Haddican [1992] 1 WLR 487
Outcomes
Appeal against Deputy Master Glover's security for costs order dismissed.
Deputy Master considered all relevant factors; even if the judge would have reached a different decision, it wasn't 'plainly wrong'.
Edwin Johnson J's freezing order substantially continued.
Jurisdiction existed based on the unsatisfied security for costs order, which was essentially equivalent to a cause of action. There was a real risk of dissipation to avoid satisfying a future costs order.
Time for complying with Deputy Master Glover's order extended to 21 April 2023.
Santina given a chance to comply with the security for costs order; otherwise, the claim would be struck out.
Zacaroli J's stay lifted.
To allow proceedings to progress based on the outcome of Santina's compliance with the extended deadline.