The Arab Monetary Fund v Hashim & Ors [1997] EWCA Civ 1298

EWCA-Civ
The Arab Monetary Fund v Hashim & Ors
[1997] EWCA Civ 1298 · 1997-03-21
(1) JAWAD MAHMOUD HASHIM(2) SALWA AL RUFAIEE(3) J O J ANSTALT(4) RUTLAND HOLDINGS LIMITED(5) FIRST NATIONAL BANK OF CHICAGO (a corporate body)(6) FIRST NATIONAL BANK OF CHICAGO (C.I. Limited)(7) FIRST CHICAGO TRUST CO (CAYMAN) LTD (a corporate body)(8) FIRST CHICAGO INTERNATIONAL (formerly known as First Chicago International Banking Corporation (a corporate body))(9) FRAGOL SA (a corporate body)(10) JAFAR JAWAD HASHIM(11) OMAR HASHIM(12) MOHAMMED MAHDI SALEH BAHIRALULLOOM(13) OAKWOOD INVESTMENT COMPANY LIMITED(14) JAMMA INTERNATIONAL SA (a corporate body)(15) ALIA AL WAHAB(16) EVER GRAND SA (a corporate body)(17) ELGER REALTY HOLDING CORPORATION NV (a corporate body)(18) LAPPANS REALTY HOLDING CORPORATION NV (a corporate body) Defendants/RespondentsA N D BETWEEN:

THE ARAB MONETARY FUND Plaintiff/Applicant

- v -

(1) MOHAMMED MAHDI SALEH BAHIRALULLOOM(2) OAKWOOD INVESTMENT COMPANY LIMITED(3) JAMMA INTERNATIONAL SA (a corporate body)(4) ALIA AL WAHAB(5) JALAL OHAN STEPHAN(6) SAMIR FADIL AWN Defendants/Respondents(Computer Aided Transcription by Smith Bernal, 180 Fleet Street, London EC4A 2HD Telephone 0171 831 3183 Official Shorthand Writers to the Court)MR PETER SCOTT QC and MR CHARLES FLINT QC (instructed by Freshfields, London EC4) appeared on behalf of THE APPLICANT THE FIRST and TENTH RESPONDENTS were not represented and did not appear MR COLIN ROSS-MUNRO QC and MR HUGO PAGE (instructed by Messrs Landau & Scanlan, London W1) appeared on behalf of THE SECOND and ELEVENTH RESPONDENTS

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THE LORD CHIEF JUSTICE : There are four applications before the court. The applicant in each case is the Arab Monetary Fund, which is the plaintiff in these proceedings. The respondents in the various applications are Dr Hashim, his wife ("Mrs Hashim") and his two sons ("Jafar" and "Omar"), although not all four of the respondents are respondents to all applications. Mrs Hashim and Omar appear by counsel to resist the applications made against them with the benefit of legal aid. Dr Hashim and Jafar are not represented and do not appear, but they have made written submissions to the court and they also resist the applications made against them.

For a number of years Dr Hashim was the Director General of the Arab Monetary Fund ("the AMF"), an organisation established by international agreement to fund economic development in the Arab world. The AMF complained that Dr Hashim abused his position to misappropriate about US $50m belonging to the AMF. Part of that sum he lost in illicit trading. Part he embezzled. The AMF complained that such part he dissipated in breach of trust to and through members of his family, including his wife Mrs Hashim, Jafar and Omar.The AMF issued proceedings against Dr Hashim, Mrs Hashim and other defendants in early December 1988. On the same day a world-wide Mareva injunction was made against both Dr and Mrs Hashim. Other defendants were later added to the proceedings, including Jafar and Omar.The action was tried by Chadwick J beginning in January 1993. After a protracted trial and strongly contested interlocutory proceedings both before and after the hearing, the judge gave judgment in stages during 1994. His judgments are very lengthy, but his main conclusions are clear. He found that Dr Hashim had fraudulently misappropriated about US $50m, the funds of the AMF. The judge also found that Dr Hashim had forged documents intending to deceive the court and had given evidence that was deliberately dishonest. In January 1994 the judge appointed interim receivers to preserve the English properties held by the defendants pending final order. The judge went on to hold that the stolen money could be traced into assets which had been held in Canada in the names of Jafar and Omar. He declared that they held properties in their names on trust for the AMF. He upheld the AMF's claim that Mrs Hashim had knowingly dissipated a sum of Can $199,000 in breach of trust at a time when she was to her knowledge restrained from doing so by the Mareva injunction.In the course of his judgment the judge found that Dr Hashim had forged documents. He also found that Dr and Mrs Hashim had knowingly broken court orders, had given false evidence and had dishonestly made false allegations. The judge ordered Dr and Mrs Hashim to pay the AMF's costs on an indemnity basis. He also ordered Jafar and Omar to pay costs on a standard basis since they had put the whole basis of the plaintiff's case in issue. The final order was sealed on 29 July 1994. Notices of Appeal were then served by Dr and Mrs Hashim and by both Jafar and Omar. It is important to note that the judge's findings of fact, including strongly adverse findings against certain of the parties, were mostly unchallenged.Meanwhile, on 8 July 1994 leave was given to the AMF to serve a Notice of Motion contending that Dr and Mrs Hashim were in contempt of court. On 19 September 1994 leave was given to the AMF to serve a second Notice of Motion to the same effect. These applications were heard on 3 and 4 October 1994 when neither Dr nor Mrs Hashim appeared. The judge concluded that Dr Hashim had broken the Mareva injunction in a number of ways: that he had failed to provide documents in compliance with an order for discovery; that he had attempted to frustrate the effect of an order of authority he had been directed to sign; that he had refused to obey an order requiring him to disclose information and documents concerning certain offshore trusts and companies; and that he was guilty of continuing contempt, the effect of which was to deny the AMF the effective relief sought in the action.In relation to Mrs Hashim, the judge found her to be in contempt by transferring funds in breach of the Mareva injunction.The judge gave both parties the opportunity to purge their contempt since they were not present at the hearing, and adjourned the proceedings until December 1994. At the adjourned hearing Dr Hashim did not appear and the judge sentenced him to two years' imprisonment for one count of contempt (the maximum term permissible by statute) and to two concurrent terms of three months' imprisonment on each of two other counts of contempt. Plainly the order was intended to coerce Dr Hashim to comply with the outstanding order for disclosure, but it has not had that effect.Mrs Hashim appeared by Leading Counsel to mitigate. She made through counsel no apology; nor did she accept any wrongdoing on her part. Still less did she make any offer to return the money. The judge did not, however, impose a custodial sentence upon her. He reminded himself of the heavy penalty in costs to which she was subject and concluded that in all the circumstances that was punishment enough. It is however plain from his judgment that he regarded Mrs Hashim as a contemnor.By this time Dr Hashim and his wife were living in Arizona. The AMF sought to enforce the judgment there against them. All four members of the Hashim family responded by entering into voluntary bankruptcy. A series of applications in the Arizona Bankruptcy Court followed. The result of these proceedings was an automatic stay of proceedings elsewhere, which limited the freedom of the AMF to proceed as it would have wished in this jurisdiction.The were also proceedings in Ontario. Jafar and Omar held three properties in Ontario which Chadwick J had declared to be held in trust for the AMF. The AMF sued in Ontario to enforce that judgment. In the first instance Farley J made declarations in favour of the AMF to the same effect as the declarations of Chadwick J. He later appointed receivers to sell the properties and account to the AMF for the proceeds of sale. In pursuance of that order two of the three properties were sold and the sale proceeds transferred to the AMF. The third property has not yet been sold, but is in the hands of receivers and is in the course of being sold.The first application made by the AMF is to debar Dr and Mrs Hashim from appealing on the ground that they are contemnors who have not purged their contempt by apologising for their breach, by remedying the breach or by expressing any genuine intention to do so or by demonstrating that they cannot remedy the outstanding breach. The AMF submits that, as a general rule, the court will refuse to hear a party in contempt and that there is nothing in the facts of this case to lead the court to exercise its discretion in favour of hearing either Dr or Mrs Hashim.The correct principle of law is in my judgment indicated in the recent decision of the House of Lords in X Ltd v Morgan-Grampian (Publishers) Ltd [1991] AC 1. At page 45 of his speech Lord Bridge cited a passage from an earlier judgment of Brandon LJ in The Messiniaki Tolmi [1981] 2 Lloyd's Rep 595 in which, at page 602, Brandon LJ had said:
"I accept that, while the general rule is that a court will not hear an application for his own benefit by a person in contempt unless and until he has first purged his contempt, there is an established exception to that general rule where the purpose of the application is to appeal against, or have set aside, on whatever ground or grounds, the very order disobedience of which has put the person concerned in contempt."
Lord Bridge also cited a longer passage from a judgment of Denning LJ in Hadkinson v Hadkinson [1952] P 285, 298, where Denning LJ had said:
"It is a strong thing for a court to refuse to hear a party to a cause 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 MR said in a similar connexion in In re Clements, Republic of Costa Rica v Erlanger (1877) 46 LJCh 375, 383:
'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."Following those citations, Lord Bridge observed:
"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 LJ 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."Lord Oliver, at page 50G, observed:
"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 LJ 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.
In the instant case, the contempt, however motivated, is as clearly contumacious as a contempt can well be and the condition imposed of lodging the document the disclosure of which is sought under cover of a sealed envelope is an entirely reasonable condition. Moreover, a litigant who demands to use the machinery of the court whilst at the same time denying its authority over him and who puts his opponent to the expense of resisting an appeal in circumstances in which successful resistance can produce only an academic result may, I think, quite properly be said to be abusing the process of the court."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.The AMF submits that the same result should follow on application of the same principles in the case of Mrs Hashim. She was found to have transferred funds in knowing breach of an injunction. She furthermore lent herself to dishonest furtherance of Dr Hashim's nefarious attempts to defeat the AMF's lawful claim. She has not apologised; she has not repaid the sum of Can $199,000, plus interest, or any part of it. Nor, in my judgment, for reasons to which I shall come later, has she demonstrated inability to repay that money. She has not undertaken to make good the money if unsuccessful on the appeal. She has not purged her contempt and she is still a contemnor. The AMF contends that there is in her case also a continuing breach as the money has not been replaced. There is some force in that contention; she has done little to claim the indulgence of the court.The AMF's case against her does however rest on a transfer of funds on one occasion in December 1988. She is not in breach of any other order in relation to the funds themselves. She may have an arguable case that she is not liable as a constructive trustee on the findings of fact made by the judge, and she may also have an arguable case that the order for costs made against her was disproportionate to her responsibility as a defendant. In all the circumstances I conclude that the interests of justice are not served by making the order sought against her and would refuse this part of the AMF's first application.The AMF's second application is to strike out the Notices of Appeal served by Jafar and Omar insofar as they relate to the three Canadian properties to which reference has already been made, these being at Rosehill Avenue, Uxbridge Farm and Lowther Avenue, all in Toronto. The ground of this application is that such parts of the appeals by Jafar and Omar are frivolous, vexatious and an abuse of the process of the court. It is common ground that the Court of Appeal has jurisdiction to strike out a Notice of Appeal if these grounds are made out in a clear and obvious case in which no extensive inquiry into the facts is called for. It is not therefore necessary to review the relevant law on that topic.The essential thrust of the AMF's argument, limited as it is to the challenge raised by Jafar and Omar to the judge's conclusion that they held these three Canadian properties as constructive trustees, is that this challenge has been overtaken by irrevocable events. The AMF relies on the facts that the Canadian judge, Farley J, made declarations against Jafar and Omar in relation to the three properties to the same effect as the declarations of Chadwick J; and that he appointed receivers to take possession of and to sell the three properties without any appeal against that order by Jafar and Omar and without any application to stay it. The AMF further relies on the fact that the order has now taken effect in relation to two of the three properties, and point to the fact that a sale of the third is in train.The AMF places reliance on expert evidence of Canadian law in order to contend that whatever order the Court of Appeal in London were now to make, the courts in Canada could not and would not undo the steps which have already taken place there and which have already taken effect. Therefore, submits the AMF, these appeals are academic since, even if Jafar and Omar were to show that the judge had erred in holding them to be constructive trustees of the three properties, the Court of Appeal would be powerless to grant relief.In resisting this argument Omar, represented by Mr Colin Ross-Munro QC, is in a difficult position since he has been unable in the time available to obtain expert evidence of Canadian law. We know little of Jafar's position, but in his case it is also relevant to note that the summons was issued and the evidence served in relation to this application on 13 February 1997, giving him only a limited opportunity to procure an expert response to the AMF's legal opinion. He would no doubt have relied on any evidence adduced by Omar.For present purposes I am content to assume in the AMF's favour, without deciding, that the Canadian courts would not reverse or undo the steps taken there in enforcement the English judgment. That may or may not be correct, but I am for the moment content to assume it. The question remains: if Jafar and Omar were to persuade the Court of Appeal that the findings of constructive trusteeship made against them in relation to the three properties were wrongly made (and assuming that no redress was available in Canada), would the Court of Appeal be powerless to grant effective relief? So far as I know, this is a novel question. We have not been referred to any case in which such a question has had to be decided. It is not perhaps surprising that the books yield no parallel or analogy, given the unusual circumstances of the present case. It is however an important principle, in my opinion, that the process of the court should not itself be permitted to become an instrument of injustice. Such could plausibly be said to be the position on the assumptions I am making, if Jafar and Omar could show that they had suffered serious and unjustified financial injury as a result of a judgment which should never have been given, unless it were held that they had by their own conduct in Canada or here forfeited the right to protection. I would be very reluctant to conclude that the Court of Appeal was powerless to make an order which would redress such injury, if persuaded that it was in principle right to make such an order. In my judgment this is by no means a plain and obvious case and I would decline to strike out any part of either appeal.I turn therefore to the third application. The AMF seeks security for its costs of the appeal against each of Dr and Mrs Hashim, Jafar and Omar. Since I have already concluded that Dr Hashim should be debarred from appealing on the ground of his unpurged contempt, it is unnecessary to consider further the application against him.The applications against Mrs Hashim, Jafar and Omar are resisted. The thrust of the argument advanced by Mr Ross-Munro for Mrs Hashim and Omar (which I treat as advanced for Jafar also), runs in brief as follows. If a respondent to an appeal in the Court of Appeal seeks an order for security for costs against an appellant, there is an onus on such a respondent to persuade the Court of Appeal that an order for security for the costs of the appeal should be made. It is not the ordinary practice of the Court of Appeal to order security against a legally-aided appellant. Accordingly there is a heavy onus on a respondent seeking an order for security against a legally-aided appellant to show that such appellant has the means to provide security in the sum ordered; otherwise the practical effect of an order is to deny the appellant the right to pursue his appeal, which is unjust. Therefore, submits Mr Ross-Munro, an order should not be made in such circumstances. Here, Mrs Hashim and Omar are legally-aided with a nil contribution. It is submitted on their behalf that the AMF cannot discharge the onus of showing that they have any assets. It is accordingly submitted that it would be unjust and contrary to principle to make an order for security against them.I regard this approach as being only partly correct. The starting point must be Order 59, rule 10(5) of the Rules of the Supreme Court which provides:
"The Court of Appeal may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just."
That rule confers a discretionary power on the Court of Appeal to order security if special circumstances are shown. There is an initial onus on a respondent to show that such special circumstances do exist and that the court should, having regard to those special circumstances, exercise its discretion in favour of making an order. A respondent usually seeks to discharge such onus by showing that if he is successful on the appeal and obtains an order for costs in his favour, it is likely to prove difficult or impossible to enforce that order. He may show that by demonstrating that the appellant is impecunious or insolvent, or by showing that the appellant is resident abroad in a place outside the European Community where enforcement procedures are ineffective, or by showing that the appellant, if unsuccessful, is likely to exert himself to defeat enforcement of any costs order.Where any of these things is shown, the respondent shows special circumstances which enable the Court of Appeal to order security if of opinion that it is just to do so; and it would ordinarily be thought just to protect a respondent against the risk of having to bear the costs of successfully resisting an appeal. If a respondent reaches this point, an onus falls on the appellant. Ordinarily the appellant seeks to discharges this onus by showing that he has an appeal which has some chance of success and that he has no means to provide security, or to provide security in the sum sought, so that the making of such an order would unjustly deny to the appellant his right to prosecute his appeal.In seeking to discharge this onus it is not enough for the appellant to show that he does not himself have the means to satisfy an order for security. He must go further and show that he cannot raise the money from any other source. It was so held in Kloeckner & Co AG v Gatoil Overseas Inc (unreported, 16.3.90), the reasoning in which I did not understand Mr Ross-Munro to challenge, it being a case not complicated by the grant of legal aid. Whether challenged or not, the reasoning in that decision seems to me consistent with principle and apt to promote the purpose of the rule.Mr Ross-Munro is, however, right to submit that legal aid introduces a new element, relevant in the cases of Mrs Hashim and Omar, although not Jafar. It is necessary to have regard to section 17(1) of the Legal Aid Act 1988, which provides:
"The liability of a legally assisted party under an order for costs made against him with respect to any proceedings shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including the financial resources of all the parties and their conduct in connection with the dispute."
It is also necessary to have regard to Regulation 123 of the Civil Legal Aid (General) Regulations 1989, which provides:
"Where in any proceedings an assisted person is required to give security for costs, the amount of such security shall not exceed the amount which could be ordered under section 17(1) of the Act."
In other words, a legally-aided appellant should not be ordered to give security in a sum greater than that of the costs which he could properly be ordered to pay if unsuccessful. It is plain from the wording of the Regulation that a legally-aided appellant is not immune from an order that he give security. So much was indeed accepted in Wyld v Silver [1962] 1 WLR 863, which also clearly established that it would not be right to make an order for security against a legally-aided appellant which would have the practical effect of debarring him from pursuing a reasonably arguable appeal.Mr Ross-Munro places heavy reliance on the statement in the 1997 White Book, Volume 1, at paragraph 59/10/20 that:
"The present practice of the court is not to award security against legally-aided appellants."
He also relies on the Legal Aid Board's determination that Mrs Hashim and Omar have no assets or income which would require them to contribute to their own costs.I have, for my part, no doubt that the ordinary practice of the Court of Appeal is accurately described in the White Book and in the great mass of cases I am sure that the grant of legal aid with a nil contribution would be taken to discharge the onus lying on an appellant to show that if an order for security were made he could not meet it. If, therefore, he can show an arguable ground of appeal, he would be strongly placed to show that an order for security would be unjust. It is, however, clear from Ballantyne v Douglas 1953 SLT 310 that, although it is for the Legal Aid Board to assess a party's means when determining his eligibility for legal aid and the extent of any contribution, it is for the court to determine what, if any, sum it is in all the circumstances reasonable for a legally-aided party to pay, whether in costs or by way of security. The court is not bound by the Legal Aid Board's determination.In the ordinary case involving an indigent litigant, resident here, the court would doubtless pay great respect to the determination of the Legal Aid Board. Such determination would however carry very much less weight, and perhaps none, if the legally-aided party were resident abroad and the Legal Aid Board had no effective way of investigating the party's means, the more so if there were reason to suppose that that party might be willing to conceal assets or mislead the Legal Aid Board.Our attention has been drawn to section 18 of the 1988 Act, which enables the costs of a successful, unassisted party to an appeal to be paid, if certain conditions are satisfied, by the Legal Aid Board. We bear the existence of that provision in mind, but it should not in my judgment deter the court from making an order for security against a legally-aided appellant if it is otherwise proper to do so. In the present case the AMF clearly established special circumstances within the meaning of Order 59, rule 10(5). Mrs Hashim, Jafar and Omar all live in Arizona. There is no reason to suppose that an order for costs of the appeal is enforceable there either quickly or at all. There is every reason to believe that all three appellants would decline to pay voluntarily and would do what they could to defeat enforcement. There is no evidence of available assets in the United Kingdom. The AMF satisfies the initial onus of showing that special circumstances exist and that it would on the face of it be just to order security. It is therefore necessary to consider the response of Mrs Hashim, Jafar and Omar, that such an order would be unjust since they have an arguable appeal and could not meet such an order.Whilst the issues raised by all three appellants appear to be in the main of a technical nature, not closely related to the underlying merits of this dispute, I would accept that all three appellants have arguable grounds of appeal. The crucial question is whether, if an order for security were made, the three appellants could meet it. Their case is simple: they have no funds to provide security and no means of raising such funds. If it is necessary for them to make good that proposition, they submit that they succeed in doing so. The AMF submits that no such inference could properly be drawn.The evidence before us is extensive and conflicting. It is, in my judgment, important for us to attempt to distinguish the wood from the trees. On the unchallenged factual findings of the judge, Dr Hashim misappropriated nearly US $50m belonging to the AMF. Of that sum, more than half was lost on commodity trading. The judge, however, found that Dr Hashim had personally pocketed some $21.4m, taking care to cover his tracks so as to make the money very difficult to trace. The AMF has succeeded in recovering about $5m, and that leaves a very substantial shortfall. Some of the funds have no doubt been disbursed in legal fees and other expenses. It is nonetheless reasonable to suppose that a substantial part of the $16m balance exists somewhere, and that money has not been accounted for. It has so far proved impossible for the AMF or the court to ascertain where that money has gone.The evidence does, however, disclose a complex web of interlocking transactions, many of them inadequately explained, involving Mrs Hashim, Jafar and Omar. Mrs Hashim appears to have been a director of a number of companies and to have held shares of which she claims that she had no knowledge. Jafar has failed to account for funds apparently passing through his hands. Omar, when still a child, played a nominal part in transactions of which he also claims to have been largely unaware. The irresistible inference is that Dr Hashim was the prime mover in these transactions and that they were designed to prevent the AMF recovering its assets.At the outset of these proceedings Morritt J said:
"The evidence as a whole demonstrates a strong case against [Dr Hashim], a clear propensity to move assets around the world so as to avoid any judgment that the plaintiff might obtain, and a remarkable ability to keep one step ahead of the plaintiff in whichever jurisdiction it chooses to institute proceedings."
That is a preliminary finding which survived a long trial. In the course of his judgment on the contempt issue, having referred to that conclusion of Morritt J, Chadwick J said:
"The evidence which I heard at the trial demonstrates the strongest possible case against the First Defendant and the clearest propensity to move assets around the world so as to avoid any judgment which the plaintiff might obtain. Unless the First Defendant can be made to disclose what he has done with the very substantial sums of money which (as I have held) he has misappropriated from the Arab Monetary Fund and for which he has not yet accounted, despite the orders which have been made against him, the Arab Monetary Fund will be denied the fruits of what has been long, expensive but successful litigation in this court."
It is, in my judgment, unnecessary to explore in depth the detailed points made by the AMF relevant to Mrs Hashim, Jafar and Omar. A few examples will suffice. I begin with Jafar.The evidence suggests that in 1988 Jafar paid three sums totalling Can $511,451 to J H H Canadian Capital Corporation of which he was President and sole director. He has not adequately accounted for that sum.Secondly, in a loan application to the Bank of America completed on 11 August 1994, Jafar declared that his net worth was some US $2.462m. In his second affidavit, sworn on 26 February 1997, he deposed:
"It is correct that in 1994 my net worth could have been $2.3 million, but this figure included: (i) the two properties which were taken by the AMF in 1995; (ii) the two cars which were taken by my bankruptcy trustee; (iii) the personal property and art which were sold by my bankruptcy trustee for $25,000."
Acceptance of that assertion involves acceptance that personal property, jewellery, etc, valued by Jafar in the sum of US $500,000, had been sold for $25,000. I find that far from convincing. There is nothing in the evidence to suggest that Jafar lacks the means to live in reasonable affluence in Arizona. He has been able to employ lawyers to act for him in Arizona and he was able to put up a substantial sum by way of bail when prosecuted for fraud in Arizona.I conclude that, if an order for security for the costs of the appeal were made and Jafar genuinely wished to pursue his appeal, he would find the means to do so from his own resources or resources supplied by or through his father.Omar is, as we understand from the evidence, a student. His case is that he has no means of his own and no regular income. He is dependent, like most students, on the support of his parents and his family. In such a situation one would expect him to have a clear recollection of large sums of money passing through his account. There is, indeed, evidence of two large receipts. The first was on 9 December 1988 when his account received a credit of Can $109,044.16. This was, it appears, the sum which Mrs Hashim transferred in breach of the injunction. In an affirmation made on 6 June 1989, Omar affirmed:
"I can confirm that paragraph 19 of the First Affirmation of my mother, the Second Defendant herein, is correct, and that the sum of C$109,004.16 [sic] was paid in to my account at the beginning of December 1988 from a term-deposit which had been in the joint names of my mother and myself."
In an affirmation made on 7 July 1994 he described this credit as "money which my mother paid into my account". In January 1995, however, when Omar was questioned in the course of the bankruptcy proceedings in Arizona, he denied all knowledge of where the money had come from and all knowledge of who made the deposit. One is bound to observe that that is a somewhat extraordinary lapse of memory.The second large receipt was a week later, on 16 December 1988, when a credit of Can $53,536.65 was received into Omar's account. According to a credit memo which has been traced, the source of that payment was Mrs Hashim.In the course of December 1988 three significant payments were made out of Omar's account. The first was on 12 December 1988, when his account was debited with Can $40,000. The question arises: to whom was that payment made? In the course of his examination in Arizona, Omar said that he did not make the withdrawal and that he did not know what happened to the money. Three days later, on 15 December 1988, his account was debited with Can $50,000. In the course of his examination in Arizona, he again said that he did not make that withdrawal and did not know what happened to the money. This is, however, an issue which has been pursued by solicitors acting for the AMF who, on 7 March 1997, wrote to the solicitors acting for Omar in these terms:
"Will you now, please as requested, respond to the question of what happened to the Can $40,000 and Can $50,000 transferred out of Omar Hashim's account at the Toronto Dominion Bank."
To that request they received a response on 14 March in a letter which said:
"We have sought instructions on these two transactions. In respect of the withdrawal of C$ 50,000 we are instructed that Jafar withdrew the money to buy some stocks and shares and repaid this sum (with a profit) the same day in US$ ($44,680.90). Our client has not yet been able to explain the other payment."
This is the first time that the explanation contained in that letter has ever been given.The third payment out of Omar's account was on 21 December 1988 when he paid out Can $50,000. It appears from his affirmation of 6 June 1989 that the payee was his mother, and that is an assertion which he repeated in an affirmation of 7 July 1994. It could very well be correct. Thus, the facts show that in December 1988 Omar received a sum of approximately Can $162,000 from his mother in circumstances inadequately explained and inadequately documented. It appears that he paid Can $50,000 to his mother and was left with a balance of Can $112,000. It is now suggested for the first time during this hearing that Can $50,000 was spent by Jafar on acquiring stocks and shares. That may or may not be the case. There is certainly no documentation to verify the transaction. It is, however, noteworthy that all these transactions went through the account of a young student with no active commercial interests of any kind.A second matter concerning Omar which is worthy of mention is a written agreement between Omar and his uncle (Dr Hashim's brother), dated 2 December 1988 when Omar was aged 17. It purported to confirm an oral agreement made when Omar was 14) for the sale by Omar to his uncle of Omar's 30% interest in a Californian partnership at a sale price of US $550,000. The explanation given on behalf of Omar is that he never had any personal interest in the partnership and that no money changed hands. That may or may not be true; the court has no way of knowing. Even assuming, however, as alleged, that the uncle was in breach of Iraqi law in making foreign investments, it is difficult to imagine any honest reason for routing this transaction through a boy of Omar's age. The inevitable suspicion is that this was all part of an ambitious smoke screen, designed to conceal the true destination and whereabouts of the AMF's misappropriated assets.If security for costs of the appeal were ordered to be provided by Omar, and Omar genuinely wished to pursue his appeal, I am of opinion that he would find the means to do so from his own resources or resources provided by or through his father.I turn to Mrs Hashim. When she was questioned in the course the Arizona bankruptcy proceedings, Mrs Hashim disclaimed all knowledge and recollection of various companies of which she had been an officer and of various transactions in which she had been engaged. In an affirmation made in March 1997, she said:
"2. I have no income or business of any kind and I am wholly dependent on my husband's family. I live with my husband at the above address. I believe that my husband is enabled to pay our living expenses by loans from friends and relations, all of which have been disclosed to the AMF in the Arizona proceedings. I have read the details of these loans,provided by my son Omar Hashim in his affirmation made on the same date as this one and believe them to be correct.
....5. As may be seen from the documents contained in exhibit SAR1, I have no resources of my own with which to provide security for costs. I am quite certain that none of the individuals providing the loans to my family would agree to fund my appeal by giving substantial security for the AMF's costs. I believe my son Omar Hashim's account of his conversations with them as disclosed in his affirmation of even date is true."Given the judge's conclusions concerning Mrs Hashim's conduct in the proceedings before him and her willingness to lie when it served her turn, no reliance can in my judgment be based on these assertions. At one time it appeared that Mrs Hashim was or may have been a woman of substantial independent wealth. It is impossible now to be sure whether she is or not. It seems quite clear however, as she asserts, that she is wholly dependent on her husband and his family for her current expenses. There is no suggestion that any of her wants are unmet. There is evidence that she lives in conditions of some affluence.I conclude that if an order were made that she provide security for the costs of her appeal, such security could be provided by her if she genuinely wished to pursue the appeal, whether from her own resources or those of her husband, or from the sources which are now supporting her and her husband. I simply do not accept that her appeal would falter for want of security if she genuinely wished to pursue it.I would accordingly order that Mrs Hashim, Jafar and Omar each provide security for the costs likely to be incurred by the AMF in resisting each of these three appeals. It will be necessary for the AMF to prepare a realistic estimate of the party and party costs it is likely to incur in resisting each such appeal. Such estimate can be approximate only, but should be furnished within a short period since too much time has already elapsed in the prosecution of these appeals. I would refer to the Registrar of Civil Appeals the task of determining the sum which each of the three parties should secure. It will not be necessary for the Registrar to consider the means of any of the three appellants, but only the sum which such appellant should provide as security for the costs of his or her appeal. I envisage that the sum to be secured by each appellant should be calculated on the assumption of his or her appeal proceeding on its own, but the final apportionment of security as between the three appellants will be subject to the decision of the Registrar.Subject to any contrary representations, I would order that each of the three appellants have 56 days from the date of determination of quantum by the Registrar to provide security in a form to be agreed between the parties, or ruled upon by the Registrar in case of dispute. I would order that if security in the sum determined by the Registrar be not provided by any of the three appellants within the time stipulated, his or her appeal shall stand dismissed without further order. In such event the AMF should have the costs of the appeal against that appellant.The fourth application made by the AMF is to stay the taxation of costs in these proceedings, pending the outcome of these appeals. In the proceedings so far, the AMF has obtained a number of very substantial costs orders against each of the four members of the Hashim family. They have obtained the benefit of some costs orders against the AMF, although these are relatively trivial in amount. There has to date been no taxation of any party's costs.The AMF's submission simply is that it is futile to embark on the laborious and expensive process of taxing costs when the final outcome of the proceedings is still uncertain and the costs orders made by Chadwick J themselves may be the subject of variation.Mr Ross-Munro, on behalf of Mrs Hashim and Omar, does not challenge the jurisdiction of the Court of Appeal to order a stay, but submits that it should not do so because the AMF has been guilty of delay and is seeking to use the threat of taxation as a means of intimidation. Mr Ross-Munro further argues that any application for further time should be made to the Taxing Master. Furthermore he asks, at the prompting of the Legal Aid Board, that there should be no order of set-off between the costs orders payable by the AMF and to the AMF respectively.It is true that there has been delay in the taxation of these costs. That is attributable in part to the weight and complexity of the proceedings. It is also attributable in part to the automatic stay on other proceedings which resulted from the Arizona bankruptcy.I can, for my part, see no advantage in requiring the AMF to seek an order from the Taxing Master when the matter is conveniently before this court. It seems to me right in principle that there should be an order for set-off between the costs payable to and by the AMF, since it would not be just that in the present circumstances the AMF should be obliged to pay money out to the Legal Aid Board. I share the view of the AMF that it is sensible to await the outcome of the appeals before embarking upon taxation, not least because the costs orders which the judge made could be varied as a result of the appeals if they are pursued.On the other hand, I accept the submission of Mr Ross-Munro that the AMF should not be permitted to keep open the threat of taxation indefinitely, although I see no reason to doubt the truth of the AMF's assurance that it genuinely intends to tax at least part of its costs. This seems probable because there is a letter of credit in Canada against which a demand of up to Can $300,000 can be made.I would accordingly order that there be a set-off of the costs orders payable in favour of and against the AMF, and would order that the taxation of costs of the proceedings in this court and the court below be stayed until determination of all three current appeals or further order.

LORD JUSTICE PETER GIBSON : I agree.

LORD JUSTICE PHILLIPS : I also agree.

ORDER:

(1) The first respondent's appeal to be struck out.(2) Applicant's first application against 2nd respondent refused.(3) Applicant's application to strike out Notices of Appeal of 10th and 11th respondents refused.(4) Applicant's application for security for costs to be provided by the three appellants (the 2nd, 10th and 11th respondents) granted.(5) Applicant to prepare a realistic estimate of the party and party costs likely to be incurred in resisting each appeal.(6) Registrar of Civil Appeals to determine the sum each party is to provide as security for costs.(7) The three appellants to have 56 days from the date of determination of quantum by the Registrar to provide security in a form agreed between the parties or decided by the Registrar in case of dispute.(8) If security be not provided by any of the three appellants in the time stipulated, his/her appeal to stand dismissed without further order.(9) In such event the applicant to have its costs of the appeal against that appellant.(10) There to be a set off of the costs orders payable in favour of and against the applicants. Applicant's application to stay taxation of costs (including court below) pending outcome of appeals granted until determination of appeals or until further order.(11) Successful party in each application to have costs; unsuccessful party in each applications to pay costs.MR SCOTT: My Lord, so far as Dr Hashim is concerned, I think your Lordship's judgment gives sufficient indication of the terms of the order that needs to be made in that regard.

THE LORD CHIEF JUSTICE: Yes.

MR SCOTT: And the same applies to the application to debar Mrs Hashim. So far as the security for costs is concerned, I wonder if I could invite your Lordship -- it may be clear, in fact, when we read your Lordship's judgment, but since it was not absolutely plain to me as your Lordship delivered it -- your Lordship referred, first, to the need for the AMF to submit a realistic estimate of party and party costs within a short space of time. I was not sure if your Lordship wanted to impose a period of time -- if so, I should like to take instructions as to that -- or whether it was intended to give the indication that it should be done promptly.

THE LORD CHIEF JUSTICE: I was not proposing to say so many days. We need to get on with this.

MR SCOTT: My Lord, I was not intending in any way to suggest otherwise. I just wanted to be clear.

THE LORD CHIEF JUSTICE: I think from both points of view it is desirable to get on with it. But I do not think it would be right to ask the Registrar to carry out the exercise on the basis of a bill which includes Dr Hashim when one simply does not know at this stage how much would be knocked out by his non-appearance.

MR SCOTT: My Lord, with the greatest respect, that is entirely understood. My Lord, so far as the Registrar's task is concerned, when he has received that realistic estimate -- and subject, of course, to any argument about the figures that may be produced -- may I enquire whether it is the court's intention that that sum arrived at by the Registrar should be reflected in orders against the three appellants in question, divided up as the Registrar thinks appropriate?

THE LORD CHIEF JUSTICE: We tried to cover this. I think what he has to do is to see what is the right sum if that appellant's appeal continued alone. We cannot treat them as a package and assume that they may all go ahead or all not go ahead. It may very well be that one will and two will not, or two will and one will not, or they all do, or they all do not. I think it is best to do it on an appellant by appellant basis. No doubt he will pay attention to the overall aggregate sum, but I think we are all of one mind on this, that the right approach is to do it one by one.

MR SCOTT: Yes, but the sum which the Registrar should seek to identify is the one that is a realistic estimate of an appeal of each of the appellants?

THE LORD CHIEF JUSTICE: Yes.

MR SCOTT: And order that sum to be provided by way of security?

THE LORD CHIEF JUSTICE: Yes.

MR SCOTT: I am very grateful, my Lord. I am sure that clarifies the position.

THE LORD CHIEF JUSTICE: I hope it is clear because we did give some thought to it.

MR SCOTT: My Lord, so far as the stay of taxation is concerned, I understand your Lordship's judgment applies to the costs of both sides?

THE LORD CHIEF JUSTICE: Yes.

MR SCOTT: And again, I think it should be possible to draft an order to reflect that. If there is any problem about it, I wonder if we might have liberty to come back?

THE LORD CHIEF JUSTICE: I hope we can avoid that because of the difficulty of convening everybody.

MR SCOTT: My Lord, that is entirely understood. It may simply be that if there is a dispute about it, that the nature of the dispute could be indicated through channels and the court will simply sign whatever order it thinks is appropriate without a further hearing?

THE LORD CHIEF JUSTICE: Yes.

MR SCOTT: My Lord, so far as the costs of these applications are concerned, the position is that Dr Hashim's costs will be dealt with in the order debarring him, and I ask for the avoidance of doubt for costs against him in respect of this application.So far as the other applications are concerned, Mrs Hashim has won on the point relating to contempt, but lost in relation to security, and insofar as it is a matter for her in relation to the stay of taxation, my Lord, I would respectfully suggest that either the AMF should have their costs in respect of those applications on which it has succeeded or alternatively that it should have some proportion of the total costs.

THE LORD CHIEF JUSTICE: Mr Scott, again this is something on which Mr Ross-Munro may wish to say something. We have got four applications involving different parties, but not all of them are parties in all applications. I have actually got a little chart here with ticks and crosses. We were inclined to think that it was going to be very, very complicated if we did not simply say: everybody should get the costs of the applications on which they were successful and pay the costs of the applications on which they were unsuccessful. It may be academic. I do not know if it helps you if I pass down my chart?

MR SCOTT: My Lord, I think we will take the chart as read. We accept the suggestion, on this side at least, of what your Lordship has said.

THE LORD CHIEF JUSTICE: Jafar and Omar clearly cannot be involved in any costs on the application to debar, for example.

MR SCOTT: No, my Lord, quite. That is understood. We entirely accept what your Lordship has said.

THE LORD CHIEF JUSTICE: And equally, Dr and Mrs Hashim cannot be involved in any costs of the application to strike out, because they were not involved and the two sons succeeded.

MR SCOTT: My Lord, those costs should be set off against one another, in our submission.

THE LORD CHIEF JUSTICE: I think that would follow.

MR SCOTT: And the orders for costs against the legally-aided appellants will have to be subject to the usual order restraining enforcement.

THE LORD CHIEF JUSTICE: Why?

MR SCOTT: My Lord, simply because they are legally aided and unless your Lordships take the view that it would be appropriate for those costs to be paid, I think under the Act it would be necessary to have that limitation.

THE LORD CHIEF JUSTICE: If we did not think it appropriate for them to pay the costs, we would not be ordering security.

MR SCOTT: Your Lordship is absolutely right about that. I simply draw attention to the point. My Lord, I think those are the only outstanding points I wish to raise.

THE LORD CHIEF JUSTICE: Yes. So far as the costs are concerned, Mr Ross-Munro, it is quite a messy order, but it is the only order we can make.

MR ROSS-MUNRO: I just wonder, my Lord, whether one could approach it in a more simple way: the first summons, dated 14 October, that we should have the costs back because the main point which took up most of the time was the contempt point against Mrs Hashim.

THE LORD CHIEF JUSTICE: Mrs Hashim will have the costs of that summons against her. Dr Hashim will have to pay the costs. You do not represent him, but we have to think about him even if you do not.

MR ROSS-MUNRO: My Lord, yes. Your Lordship had in mind therefore that every application that a party won, they would get the costs of that?

THE LORD CHIEF JUSTICE: Yes.

MR ROSS-MUNRO: So, for example, the striking-out where in fact Omar has won --

THE LORD CHIEF JUSTICE: He would get the costs of that.

MR ROSS-MUNRO: And I suppose Jafar, even though I do not represent him?

THE LORD CHIEF JUSTICE: Yes.

MR ROSS-MUNRO: My Lord, there are one of two other matters that we would wish to clear up. So far as the stay is concerned, as I understand it the stay would only relate to the party and party costs awarded against the AMF? In other words, the stay would not apply obviously to the vast majority of costs which are the costs under the Legal Aid Certificate?

THE LORD CHIEF JUSTICE: No. The stay applies to all the costs. There will be no taxation of costs until the outcome of the appeals is known or until further order.

MR ROSS-MUNRO: My Lord, I think, with respect, this is something the parties have been in agreement up to now, that so far as our legal aid costs --

THE LORD CHIEF JUSTICE: I am not talking about the legal aid costs. I was only talking about the inter partes orders.

MR ROSS-MUNRO: That is what I wanted to know. My Lord, the second matter -- which I think I have understood rightly, but I just want to be absolutely certain -- is that once my learned friends put in what they say is a reasonable amount and once it is considered by the learned Registrar, who then comes to a figure, my Lord is it the 56 days that we have after the learned Registrar's decision?

THE LORD CHIEF JUSTICE: Yes, it is. From the moment when he says X, Y and Z are the three figures that the appellants must secure, the 56 days begin to run.

MR ROSS-MUNRO: My Lord, I am obliged. My Lord, your Lordship was indicating about the costs of these application so far as they are awarded to the AMF --

THE LORD CHIEF JUSTICE: Yes.

MR ROSS-MUNRO: My Lord, I would ask your Lordship for the normal order because, as I understand it, your Lordships have found that it is reasonable under section 17 and Regulation 123 that there should be security ordered because they can raise it from other sources. My Lord, that being what is reasonable, we would say that it does not necessarily follow that in addition your Lordships find it reasonable that Mrs Hashim and Omar can also pay the additional costs where the AMF won.

THE LORD CHIEF JUSTICE: It may not follow, but we think it is implicit. I agree that the costs of this application are different from the costs of the appeal, but there is nothing in the evidence that would justify us in saying that they can provide one but not the other.

MR SCOTT: Lastly, the costs which have been awarded today to the various parties, do I correctly understand, if I may enquire whether the court's order staying taxation is intended to apply to those orders?

THE LORD CHIEF JUSTICE: I did actually say so.

MR SCOTT: I thought your Lordship did.

THE LORD CHIEF JUSTICE: Taxation of the costs for the proceedings in the court below and in this court.

MR SCOTT: I am grateful.MR ROSS-MUNRO: The very last matter -- to make it clear, as your Lordship knows, we have a duty to the Legal Aid Fund -- on the costs where we have been successful, which will be payable to the Legal Aid Fund, is it your Lordship's intention that those costs should be set off?

THE LORD CHIEF JUSTICE: Yes.

MR ROSS-MUNRO: My Lord, having asked your Lordship that, that is all that I ask.

THE LORD CHIEF JUSTICE: We are very grateful to you both for enabling us to find our way through this extremely difficult morass of material. Thank you.

Cited in 1 later judgment