Fourie v Le Roux - [2007] UKHL 1

HOUSE OF LORDS

SESSION 2006–07
[2007] UKHL 1

on appeal from: [2005] EWCA Civ 204

OPINIONS

OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE

Fourie (Appellant) v. Le Roux and others (Respondents)

Appellate Committee

Lord Bingham of Cornhill

Lord Hope of Craighead
Lord Scott of Foscote
Lord Rodger of Earlsferry
Lord Carswell

Counsel

Appellants: Respondents:

Leon Kuschke Stuart Isaacs QC

Sam Neaman Tom Smith

(Instructed by CMS Cameron McKenna

(Instructed by Rawlinson Butler LLP)

LLP)

Hearing dates:

13 and 14 NOVEMBER 2006

ON
WEDNESDAY 24 JANUARY 2007

HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

Fourie (Appellant) v. Le Roux and others (Respondents)
[2007] UKHL 1

LORD BINGHAM OF CORNHILL

My Lords,

1. I have had the advantage of reading in draft the opinion of my

noble and learned friend Lord Scott of Foscote. For the reasons he gives
I would dismiss the appeal and make the orders which he proposes.

2. Mareva (or freezing) injunctions were from the beginning, and continue to be, granted for an important but limited purpose: to prevent a defendant dissipating his assets with the intention or effect of frustrating enforcement of a prospective judgment. They are not a proprietary remedy. They are not granted to give a claimant advance security for his claim, although they may have that effect. They are not an end in themselves. They are a supplementary remedy, granted to protect the efficacy of court proceedings, domestic or foreign: see Steven Gee, Commercial Injunctions, 5th ed (2004), pp 77-83.

3. In recognition of the severe effect which such an injunction may have on a defendant, the procedure for seeking and making Mareva injunctions has over the last three decades become closely regulated. I regard that regulation as beneficial and would not wish to weaken it in any way. The procedure incorporates important safeguards for the defendant. One of those safeguards, by no means the least important, is that the claimant should identify the prospective judgment whose enforcement the defendant is not to be permitted, by dissipating his assets, to frustrate. The claimant cannot of course guarantee that he will recover judgment, nor what the terms of the judgment will be. But he must at least point to proceedings already brought, or proceedings about to be brought, so as to show where and on what basis he expects to recover judgment against the defendant.

4. On his application to Park J, Mr Fourie failed to do this. It follows that the judge was wrong to make the order he did. It also follows, in my opinion, that Mr Jarvis QC, the deputy judge, was right to discharge it. There had been a clear neglect of the correct procedure, and the court should not absolve the defaulting party from the consequences of its neglect by maintaining the order in force: Siporex Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd’s Rep 428, 436. That, I think, is so whether or not the deputy…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] UKHL 1
Decision Date: 24 January 2007

CaseChat Overview and Summary

In Fourie v Le Roux, the House of Lords addressed the issue of whether the lower court had jurisdiction to grant a freezing order to the appellant, Mr Fourie, in his capacity as liquidator of two South African companies. The central issue was whether the lack of formulated proceedings for substantive relief at the time the freezing order was sought deprived the court of jurisdiction. The Lords held that while the court had jurisdiction in the strict sense, it was improper to grant the freezing order without clear formulation of the substantive proceedings. The Lords emphasised the importance of maintaining safeguards against misuse of Mareva injunctions and agreed with the lower court's decision to discharge the order. The Lords also dismissed the appeal against the indemnity costs order, although some expressed reservations about its propriety. They further ruled that the directions for the enforcement of the cross-undertaking in damages were wrong in principle and should be set aside.

Orders