Raja v Van Hoogstraten & Ors [2006] EWHC 998 (Ch)

Case No CH 1993 R 6492[2006] EWHC 998 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 8 th May 2006
Before
MR JUSTICE LIGHTMAN
Between
ASHGAR SABIR RAJA (REPRESENTING THE INTERESTS OF THE ESTATE OF THE LATE MOHAMMED SABIR RAJA)ClaimantMR NICHOLAS VAN HOOGSTRATENDefendantsSTITCHACRE LIMITEDDefendantRAREBARGAIN LIMITEDDefendantCASTRIES LAND LIMITEDDefendant
Mr Peter Irvin (instructed by Healys, 3 Waterhouse Square, 142, Holborn, London EC1N 2SW) for ClaimantMr van Hoogstraten appeared in person for in personHearing Hearing Date: 5 th April 2006Raja No 7
Judgment

INTRODUCTION

[1]I have before me four applications by Mr van Hoogstraten. I shall deal with each of such applications in turn.

FREEZING ORDER

[2]The first application is to discharge a freezing order made against him on the 23rd November 2005.[3]The late Mr Raja commenced proceedings for an account against Mr van Hoogstraten (“the Chancery Action”) on the 8th October 1993. Mr Raja later added a claim for damages for fraud. On the 2nd July 1999 Mr Raja was murdered by Mr Knapp and Mr Croke who were convicted of his murder. Mr van Hoogstraten was charged with being a party to the murder but, though initially convicted of manslaughter, after an appeal and retrial was acquitted.[4]On the 27th August 2002, at a time when the conviction for manslaughter stood, the estate of Mr Raja (“the Estate”) was granted a worldwide freezing order against Mr van Hoogstraten and companies associated with him (“the Companies”) to protect the Estate against the risk of dissipation of his assets by Mr van Hoogstraten designed to defeat any judgment obtained against him. The order contained a £5 million cap (reflecting the quantum of anticipated judgments and orders for costs sought against him) and provided that the order should be released if Mr van Hoogstraten or the Companies provided security in this sum. In the course of his judgment granting this order Peter Smith J held that Mr van Hoogstraten had been utterly untruthful in his evidence about the ultimate ownership of assets in the names of third parties. No such security has been provided at any time.[5]Following the murder, the Estate and members of Mr Raja’s family commenced in the Queen’s Bench Division further proceedings (“the QBD Proceedings”) against Mr van Hoogstraten in respect of the murder.[6]On the 26th January 2005 I gave directions for the transfer of the QBD Proceedings to the Chancery Division and the trial as the first stage in all the proceedings (QB and Chancery) of the issue whether Mr van Hoogstraten was party to the murder (“the Preliminary Issue”) and I directed that the trial of the Preliminary Issue should commence on the 14th November 2005.[7]Thereafter Mr van Hoogstraten made repeated unsuccessful efforts to derail the timetable to trial and prevent the Preliminary Issue being tried in November 2005. This involved a series of abortive applications to me and to the Court of Appeal. A series of orders for costs were made against Mr van Hoogstraten the greater part of which remain unsatisfied.[8]Over the period from the 26th January 2005 there were a series of case management conferences in the course of which Mr van Hoogstraten made repeated complaints about the freezing order but despite my repeated invitations to him and the Companies to make applications for their discharge if they had genuine grounds for complaint, they declined to do so.[9]At the hearing of the Case Management Conference held on the 6th October 2005, when Mr van Hoogstraten again raised the matter of the freezing order, I told him that as an indulgence to him and the Companies I would make time available to hear belated applications in respect of the freezing order if he or the Companies wished to make them, and he and the Companies did make them. I heard the Companies’ application on the 1st, 3rd and 4th November 2005. In the course of the hearing it became apparent to me that (without deciding the matter) there were strong (although as yet untested) arguments for questioning whether the freezing order should ever have been granted and whether, if it should ever have been granted, it was justifiable to grant it in the absolute terms in which it was granted. I had in mind in particular:(1) the judgment in this action of Chadwick LJ of the 21st July 2004 (with which the other members of the Court of Appeal agreed) which set aside the grant of final judgment in favour of the Estate and discharged a sequestration order granted at the Estate’s instance; and(2) the judgment of Clarke LJ in Halifax plc v. Chandler [2001] EWCA 2042 Civ 1750. Chadwick LJ (without any full argument on the issue) clearly took the view that for the reasons he gave the freezing order ought not to have been granted and Clarke LJ made plain that freezing orders (in particular against third parties and accordingly against the Companies) ought not to prevent dealings in the ordinary course of business. I was troubled that the Companies’ application for discharge was inevitably taking a great deal of time required for preparation for the trial due to commence on the 21st November 2005. It was plain to me that at the least the freezing order against the Companies would be likely to require modification to permit dealings by the Companies in the ordinary course of business.[10]Accordingly on the 3rd November 2005 prior to the conclusion of the address of counsel for the Companies I told Mr Irvin, counsel for the Estate, that the Estate should consider whether to agree a modification of the freezing order against the Companies and that, if he unreasonably failed to do so, the Estate would be at risk as to the costs of the application before me. This fact was self-evident but worth reminding him of.[11]Early on the following day (the 4th November 2005), negotiations commenced between counsel for both sides for an interim order to regulate affairs until after judgment on the Preliminary Issue, and late that afternoon a consent order was agreed whereby the Estate agreed to the discharge of the freezing order against the Companies and the Companies in turn agreed to give undertakings in their place in respect of the interim period pending judgment on the Preliminary Issue.[12]On Wednesday the 9th November 2005 Mr van Hoogstraten proceeded with his personal application to discharge the freezing order against him. Immediately counsel for the Estate and Mr van Hoogstraten entered into negotiations and the terms of a consent order were agreed that day and the consent order was signed and drawn up the following morning. The order is in two parts. In one part the Estate agreed to the discharge of the freezing order against Mr van Hoogstraten. In the other Mr van Hoogstraten gave undertakings to the court. The consent order was again an interim arrangement pending judgment on the Preliminary Issue.[13]Shortly before the hearing of the Preliminary Issue the Estate made an application to reinstate the freezing order against Mr van Hoogstraten and this came before me on the 22nd November 2005. Mr van Hoogstraten did not attend the hearing. I made clear at the hearing my anxiety that any reinstatement of the order should not impede or deter Mr van Hoogstraten from appearing and indeed being represented at the forthcoming trial of the Preliminary Issue. I accordingly deferred giving judgment until after the commencement of the trial of the Preliminary Issue. If Mr van Hoogstraten had attended or been represented I would have deferred judgment or any order made until after the trial of the Preliminary Issue was concluded. Mr van Hoogstraten did not attend and was not represented. (He had earlier stated that this would be his position.) In the circumstances there was no valid reason for deferring the giving of judgment any longer. Accordingly I gave judgment on the Claimant’s application on the 23rd November 2005. By that judgment I held that the freezing order should be reinstated for the reasons there set out.[14]On the 19th December 2005 I gave judgment on the Preliminary Issue. I held that Mr van Hoogstraten had recruited Mr Knapp and Mr Croke to murder Mr Raja with the motive of thereby halting or achieving an advantageous settlement of the Chancery Action and I ordered Mr van Hoogstraten to pay forthwith the Estate’s costs of the Preliminary Issue on an indemnity basis and to pay £500,000 on account of such costs. I also ordered an inquiry as to damages. Mr van Hoogstraten has failed to pay any part of the £500,000 costs or the sums outstanding on earlier costs orders against him amounting to some £35,000.[15]Mr van Hoogstraten is presently applying to the Court of Appeal for permission to appeal against my judgment on the Preliminary Issue. That application is due to be heard on the 9th May 2006.[16]Two things are in my judgment clear. The first is that Mr van Hoogstraten has determined not to pay any part (as he has not paid any part) of the outstanding orders for costs against him or indeed any judgment in this action. This is apparent from what he has told me at the various hearings before me reinforced by his continuing defaults in compliance with costs orders made against him and his defiance of any order made against him with which he disagrees: see e.g. paragraph 9 of my judgment on the Preliminary Issue. I refer to the most recent manifestation of this determination in paragraph 22 of my judgment on the Preliminary Issue, namely an exchange in court between Mr van Hoogstraten and two members of the public overheard by Ms Sally Collyer, the clerk to Mr Irvin, counsel for the Estate and reported by her to the Estate’s solicitor Ms Hare. Paragraph 6-8 of Ms Hare’s witness statement reads as follows:
“6. The Defendant was overheard to say that he knew that Judgment had gone against [him] but that was the best thing that could happen. The Judge had fallen right into his trap. He couldn’t get justice in the lower courts because he was filthy rich. He went on to say that he had no money because it was all in trust for his children so he couldn’t afford to instruct counsel. 7. I am also told by Sally Collyer and verily believe that the Defendant was overheard to say, ‘what the other side don’t know is that I’m going tomorrow to have myself declared bankrupt so they won’t get a penny out of me’. 8. I believe that these remarks, taken in the context of the Freezing Order having been discharged, indicate a clear intention on the part of the Defendant to do everything in his power to frustrate the enforcement of any Judgment that the Claimant may obtain. …”
[17]The second is that (on the evidence before me):(1) Mr van Hoogstraten has substantial funds and access to substantial funds. He has stated in a television interview that he was worth over £100 million and he was the richest man in Zimbabwe: see paragraphs 86 and 89 of the judgment on the Preliminary Issue; and(2) that so far as he does not have substantial funds, that this is on account of tactics and devices adopted by him to place them beyond the reach of his creditors.[18]One of the main planks in Mr van Hoogstraten’s defence in the criminal proceedings (as set out in the transcript of his evidence in chief at the criminal trial) was his great wealth (which he claimed) left him with no motive to harm Mr Raja because the Chancery Action was a mere pinprick to someone as rich as him; that his art collection was worth £200 million; that he had got about 30 bank accounts in England; and that he had seven or eight hotels in Brighton and Hove including the Courtlands Hotel. Press reports and other material point to his having enormous investments in Zimbabwe. Further there is evidence before me of Mr van Hoogstraten’s use e.g. of Miss Caroline Williams (the mother of one of his children) as a nominee or stooge director: see Mr Lightfoot’s first affidavit paragraph 80.[19]In paragraph 10 of my judgment on the Preliminary Issue I stated:
“He is (as he has stated in numerous television interviews) enormously wealthy and has access to enormous funds, although since the date of a claim against him by the Inland Revenue in the 1970s resulting in a tax liability for over £3 million, (as he stated on various occasions and in particular in an interview in the Evening Standard of the 15th June 1998) he has taken steps to “squirrel” his assets away. Whilst Mr van Hoogstraten has as his business address in England and as his address for the purpose of these proceedings the Courtlands Hotel, Hove (one of the seven hotels which he owns in Brighton and Hove) he has made his home in Zimbabwe where he is a very substantial landowner and investor and a friend of those in power.”
[20]In paragraphs 11, 12 and 14 I said:
“11. Mr van Hoogstraten made application to me on the 11th February 2005 to discharge the order for directions made on the 26th January 2005. I dismissed the application with costs and Mr van Hoogstraten did not appeal. In the course of the hearing I advised Mr van Hoogstraten that he should obtain legal representation and said that it was clear on the evidence that Mr van Hoogstraten had ample means to pay for legal representation and that any necessary authorisation of expenditure for this purpose under the Freezing Order would be available. When I asked Mr van Hoogstraten what money or assets he had in his own name he replied: “Relative peanuts, may be £2 or £3 million”
(p.14 of transcript). 12. When I told Mr van Hoogstraten that he could sell any of his assets to raise the necessary funds, the following exchange took place: ‘(Mr van Hoogstraten) But why should I sell anything and incur capital gains tax for these people’s benefit? (Lightman J) I will tell you this. If you have assets of £2-£3 million – (Mr van Hoogstraten) I am not selling anything. It is as simple as that. I don’t need to and I don’t have to. The freezing order needs to be lifted. It was obtained by perjured evidence and it is illegal and I put in an application to have it lifted - 2½ years ago to have it lifted and the court lost it. It is up to the court to sort it out.’” (p.15) 14. In my judgment given on the application made on the 11th February 2005 I stated my finding on the evidence before me that Mr van Hoogstraten had many millions of pounds: I referred to his admission of assets in his own name of £2-3 million and his refusal to realise any assets to pay for legal representation. I reminded him of the freedom which he had to apply for the discharge of the Freezing Order and warned that by acting in person he could not imperil the timetable for the trial of the Preliminary Issue.”[21]Mr van Hoogstraten’s repeated assertions in answer to the freezing order that he has no means and in particular no means to meet his own legal costs and the costs order and judgments against him lack any credibility, most particularly in the absence of any documentary or corroborative evidence afforded by him of the dealings which he has had with his very substantial wealth. It is sufficient to give two examples of this refusal to document or corroborate what he says:(a) at one stage in these proceedings he admitted to owning substantial properties in France, but then later claimed that they had been placed in trust. This was a bare assertion unsupported by any particulars or any documentary or corroborative evidence; and(b) Mr van Hoogstraten’s art collection and the contents of his safety deposit box have “disappeared”: no explanation has been forthcoming.[22]At the last hearing before me prior to this hearing when Mr van Hoogstraten stated that he wished to apply to discharge the freezing order against him, I made clear to him that on such application I would need to know what he had done with his substantial wealth. He replied that he would not make this disclosure. He proposed merely to go into the witness box, state that he had no assets today and maintain this answer to any question as to his means. I told him that this would not be satisfactory and that he would have to disclose the dealings which have taken place with his assets and provide supporting documentation in this regard and (as I recall) in regard to his present assets and income.[23]When later Mr van Hoogstraten informed my clerk on the telephone that on the forthcoming case management conference on outstanding matters in this litigation he proposed to make the application to discharge the freezing order, conscious of the heavy costs of a contentious abortive application of this character for the Estate, which (as past history indicates) can have no prospect of recovery of any costs ordered to be paid by him, I indicated my unwillingness to hear the application unless and until the required evidence was forthcoming, for it would be abortive. Nonetheless Mr van Hoogstraten has insisted that he be allowed to proceed with this application today and in the circumstances I have allowed him to do so.[24]I make it clear that on this application I am concerned only with the issue raised by Mr van Hoogstraten whether the Estate is now entitled to a freezing order. I am not concerned with the question whether the freezing order should or should not have been granted in 2002. That is an issue which may or may not have to be determined at a later date. The Estate justly says that, if and when an application by Mr van Hoogstraten is to be heard on that issue, having regard to Mr van Hoogstraten’s history of non-compliance with orders for costs, the Estate should be afforded security for the very substantial costs which such an application will occasion the Estate. The estimated duration of the hearing is at least three days. I should add that it may be proper to order that Mr van Hoogstraten also first discharges all outstanding orders for costs against him.[25]Whatever the position may have been prior to the 19th December 2005, when I gave judgment on the Preliminary Issue, after that date the application must be viewed in the light of the contents of my judgment on the Preliminary Issue and the outstanding orders for costs totalling some £535,000 and the prospects of substantial judgments in the proceedings by Mr Raja’s estate and his family against Mr van Hoogstraten. My judgment on the Preliminary Issue throws light on Mr van Hoogstraten’s character and the means which he is willing to have recourse to achieve his ends. On his own admission he is ruthless as well as violent: see paragraph 85.[26]On the material before me it is apparent that Mr van Hoogstraten has arranged his affairs to enable him to say that he has no assets available to meet a judgment if this suits his purpose. His present statement of assets (affording the prospect of a realisation of practically nil by the Estate) is bare in the extreme. I am not satisfied that he does not have very substantial assets. This can only be tested when his “dealings” with his assets are properly disclosed. Further whether or not these assets are within his ownership I am not satisfied that he does not have assets and funds available to him under his control or under the control of those who will give effect to his wishes. (It may be noted that he told me that his young son had helped finance him on certain applications in these proceedings.) This means that it is essential (as I have already told him) that Mr van Hoogstraten discloses exactly what he has done with his substantial assets, that he documents any dispositions of them, that he discloses what professionals or others he instructed on the dispositions, that he makes disclosure of his income tax and other returns and generally is cooperative in an investigation into his assets and means. Presently he is willing to disclose nothing and is uncooperative. I take the view that there is a very real prospect that there are assets within his ownership or control and that, prompted by pressure for payment to creditors, he will take evading action. Overweening self confidence (a character of Mr van Hoogstraten) may well have led him to defer any effective disposition and his attachment to money (to which I refer in paragraph 89 of my judgment on the Preliminary Issue) may have deterred him from irrevocably parting with his assets.[27]In the circumstances I dismiss Mr van Hoogstraten’s application.

DISCLOSURE BY THE ESTATE

[28]The Estate has disclosed that it has properties and assets of the value of £1.5 million to support its cross-undertaking in damages. In view of the judgment obtained on the Preliminary Issue and the orders for costs against Mr van Hoogstraten and the outstanding claims against him, that appears to me to be more than adequate. There is no justification for any complaint in respect of disclosure or quantum by Mr van Hoogstraten, notwithstanding the massive claims which he alleges that Tombstone has against the Estate but which Tombstone has yet to substantiate.

CROSS-EXAMINATION OF MR LIGHTFOOT

[29]Mr Lightfoot was the principle deponent on the Estate’s application in 2002 for the freezing order. There can be no absolute right (as claimed by Mr van Hoogstraten) to cross-examine him now on his witness statement on that application. A cross-examination on this application is out of the question. I do not have to decide whether he may be cross-examined on an application challenging the grant of the freezing injunction in 2002. But I can say that I am not satisfied on the material before me that there is any requirement for his attendance for this purpose. I can see no evidence which supports the allegation by Mr van Hoogstraten that Mr Lightfoot lied or deliberately misled the court. The application by Mr van Hoogstraten appears to be an expression of anger and resentment against Mr Lightfoot, and that is not a reason to order attendance for cross-examination.

CROWN PROSECUTION SERVICE

[30]Mr van Hoogstraten complains that the Crown Prosecution Service failed to comply with an order made ahead of the trial of the Preliminary Issue requiring disclosure of material sought at that trial. Mr van Hoogstraten did not pursue any complaint in that regard at the trial, which for his own reasons he avoided attending. Now that judgment has been given on the Preliminary Issue, the order against the CPS is fully spent and the question whether there was any non-compliance is academic. This application is both futile and hopeless.

CONCLUSION

[31]I accordingly dismiss Mr van Hoogstraten’s applications.