England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE LIGHTMAN
CH 1993 R 6492

		Royal Courts of Justice Strand, London, WC2A 2LL
		17/12/2008

Lord Justice Mummery :

1. All the members of the court have contributed to the writing of this judgment.

A. AN OVERVIEW

2. The principal issue in this unusual case stems from the finding of the trial judge (Lightman J) that the respondents irregularly obtained a court order from Peter Smith J on 13 December 2002. The order was for the amendment of a writ of sequestration. As a result of the amendment the sequestration applied not only to assets held in the name of the individual (Mr Nicholas van Hoogstraten), against whom it was originally issued for his alleged contempt of court, but also to his assets held in the name of Tombstone Limited (Tombstone). The appellant Tombstone was not a party to the litigation. It was not alleged to be in contempt of any court order. No notice of the application to the court was given to it. It was given no opportunity to object to the amendment on the ground that it owned the assets held in its name.
3. As fully explained in the judgment below ([2007] EWHC 1743 (Ch)) the writ of sequestration was issued on the respondents' application against the assets of Mr Nicholas van Hoogstraten as the first defendant in an action being pursued against him by the respondents. He was the sole director of Tombstone, a substantial property company. It was controlled by him at all relevant times. He made decisions and gave instructions on its behalf.
4. Mr van Hoogstraten had been found guilty by Peter Smith J on 11 October 2002 of contempt of court for not complying with an order for the disclosure of his assets. Disclosure was required by a freezing order obtained by the respondents from Rimer J in August 2002. The respondents obtained leave for the issue of a writ of sequestration against him to enforce obedience to the court order. Then they obtained the order for the Tombstone amendment. Tombstone claimed that, as the order for the amendment was irregularly obtained against it as a non-party, innocent of any contempt and without prior notice, it was entitled, as of right, to have the order set aside as a nullity. The effect of setting the order aside as a nullity would be to render the respondents liable to compensate it for the loss and damage inflicted by alleged tortious acts of trespass to, and conversion of, its assets. Although the acts were committed by the sequestrators, the respondents were liable to Tombstone in damages by reason of having procured and authorised the sequestration by irregularly obtaining the amendment order.
5. The finding of procedural irregularity meant that Lightman J had to determine the nature of the court's power to set aside the 13 December order. He also had to consider, in the context of Tombstone's tort claims, the effect of setting it aside on the lawfulness of acts done by the respondents while the court order was in force, and on the availability of the respondents' pleaded defence of judicial authority.
6. In his judgment of 26 July 2007 Lightman J upheld the respondents' defence of judicial authority. They were not liable for the torts of trespass and conversion. He dismissed Tombstone's claims against them for damages, as set out in Section G of its Particulars of Claim.
7. Tombstone now appeals with permission given by Rimer LJ on 21 November 2007. The respondents to the appeal are (1) the estate of the late Mr Mohammed Raja, who was the original claimant in the action against Mr van Hoogstraten, but ceased to be so in the criminal circumstances described later, and (2) Healys, the firm of solicitors who acted for Mr Raja's estate (the Estate) in obtaining both the original writ of sequestration and the order for the amendment of it. At that time the sequestrators also instructed Healys.
8. It is common ground that sequestrators, as officers of the court who act under the order of the court, are entitled to immunity from suit (see Gosset v. Howard (1845) 10 QB 359 at 453-4). The respondents do not enjoy the same immunity. The pleading in their defence was that the conduct complained of by Tombstone as tortious was authorised by an order of the High Court i.e. the order of Peter Smith J dated 13 December 2002. They denied that the order was a nullity or that, on being set aside, it should be treated as having been a nullity. They asserted that, while it was in force, it was a valid order providing legal protection to those who had obtained it and acted upon it: see Williams v. Smith (1863) 14 CB (NS) 596 at 621-622, 623-4 and 625; Smith v. Sydney (1871) QB 203 at 206-207 (distinguishing between acts of the court and acts of the parties); and Clerk & Lindsell on Torts (19^th ed paras 15-44 to 15-46. (It is not alleged that the respondents are legally liable in damages to Tombstone simply for having obtained the issue of the writ of sequestration, or for otherwise irregularly issuing execution or legal proceedings, or for taking enforcement measures through the court.)
9. In this appeal Tombstone says that Lightman J's approach to the irregularly obtained order and its legal consequences was wrong. He relied on discretionary powers in the Civil Procedure Rules (CPR). He exercised the discretion under the CPR so as to preserve to the respondents the protection of the court order for acts done pursuant to it. Tombstone contends that the relevant power to set aside the order was that available under the inherent jurisdiction of the court. In the exercise of the inherent jurisdiction the irregular order could and should be set aside as of right (ex debito justitiae). It should be treated as a nullity, as never having had a legal existence. The respondents would thereby lose all protection afforded by the court order. There would be no defence of judicial authority for tortious acts to Tombstone's assets procured and authorised by them.
10. On the appeal Mr Nigel Jones QC appeared for Tombstone. Mr Andrew Onslow QC presented the case for Healys. The Estate, appearing by its solicitor, adopted Mr Onslow's submissions. Mr van Hoogstraten neither appeared nor was he represented.
11. There is also a costs appeal against an order of Lightman J. The respondents appeal and Tombstone's cross appeals against Lightman J's order dated 9 November 2007 that Tombstone pay 60% of the costs of the Section G claims in the re-amended particulars of claim incurred by the respondents.

B. BACKGROUND DETAIL

12. Mr Raja was a property developer. On 8 October 1993 he began an action for damages against Mr van Hoogstraten. In April 1999 he obtained the leave of the court to amend his particulars of claim to plead fraud.
13. On 2 July 1999 Mr Raja was shot dead. Arrests and criminal charges followed in September 2001. Mr van Hoogstraten was accused of engaging 2 men to murder Mr Raja. On 22 July 2002 the two gunmen were convicted of Mr Raja's murder. Mr van Hoogstraten was acquitted of murder. He was convicted of manslaughter and sentenced to 10 years imprisonment. The Court of Appeal quashed his manslaughter conviction in July 2003 and gave directions leading to his re-indictment. Mr van Hoogstraten remained in prison until December 2003 when the fresh indictment was quashed. He was then released from prison.
14. In the civil proceedings Lightman J gave a series of judgments culminating in a judgment of 19 December 2005 in which he held that Mr van Hoogstraten had hired two thugs to murder Mr Raja in order to halt the prosecution of his claim. The Court of Appeal refused permission to appeal against that judgment.
15. The civil proceedings continued while Mr van Hoogstraten was in prison. Mr Raja's son Asgar Sabir Raja (Asgar) had been appointed to represent the Estate in the action. He was later replaced by his mother, who was the widow and executrix of Mr Raja. Asgar was authorised to represent the Estate at the hearing of this part of the case before Lightman J.
16. The relevant events in this part of the civil proceedings date from August 2002 when the Estate applied to the court for permission to re-amend the particulars of claim, plead the criminal conviction and obtain judgment against Mr van Hoogstraten by reason of the conviction. On 27 August 2002, without notice, the Estate applied to the court for a freezing order over the assets which Mr van Hoogstraten owned or controlled. Rimer J granted a freezing order over all his assets. Orders were made for the provision of information within 1 week of the service of the order in an affidavit of all Mr van Hoogstraten's assets worldwide exceeding £10,000 in value, whether in his own name or not (paragraph 9). Schedule E to the freezing order listed, as subject to the order, various properties that were registered in the name of Tombstone. Mr van Hoogstraten was believed to have a beneficial interest in the properties. In Schedule F to the order Tombstone itself appeared in the list of businesses and enterprises owned or controlled by Mr van Hoogstraten, or in which he had a beneficial interest. The return date was fixed for 10 September 2002. The order was served on Mr van Hoogstraten and his solicitors. A copy of it was served by post at Tombstone's registered office.
17. On 3 September 2002 Mr van Hoogstraten gave notice of his intention to act in person. This was a decision that he made at various crucial stages in the civil proceedings. While accepting that he was entitled to do this for his own reasons, Lightman J commented that the decision "played a large part in giving rise to the difficulties, confusion and mistakes which later arose." The result was that Peter Smith J, who made the orders that have led to these claims, did not have at critical stages of the litigation the assistance of counsel on behalf of Mr van Hoogstraten.
18. An account of the unfolding procedural events and the conduct of the parties and their advisers is unavoidable. They are highly relevant to the fact-sensitive considerations affecting the exercise of a judicial discretion. Reference can be made to Lightman J's judgment for the full details, but, without highlighting significant detail in this judgment, it is impossible to explain the arguments advanced on this appeal against the decision of Lightman J to exercise his discretion against removing from the respondents the protection of the court order for what they did pursuant to it. Tombstone's tort claims against the respondents are based on procedural events and on the conduct of the parties, as are the submissions of the respondents and the judge's exercise of the discretion, which he held existed under the CPR, to preserve the protection of judicial authority to Tombstone's tort claims. We summarise and comment on the main events year by year. Unfortunately, this adds considerably to the length of a judgment on what is, at the end of the day, quite a short point.

2002

19. For reasons beyond his control (he was still in prison following conviction and sentence) Mr van Hoogstraten was unable to attend court on the September return date set by Rimer J on making the freezing and disclosure orders. Mr van Hoogstraten complained at the time that he was prevented from attending court and said that the orders ought to be set aside. He was informed by the court, when continuing the freezing order, that he needed to make a formal application to set it aside. His formal application on 25 September 2002 was lost by the court. On 26 September Engleharts, acting as solicitors for Tombstone, wrote to Healys requesting the removal of Tombstone from Schedule F to the order on the grounds that the order interfered with its business. No complaint was made about the inclusion of Tombstone's assets in Schedule E. Healys refused the request, stating that there was significant evidence that shares in Tombstone were held by nominees for Mr van Hoogstraten and that he had substantial beneficial interests in the shares and in the underlying assets. In a letter of 1 October 2002 Healys wrote to Engleharts stating that Mr van Hoogstraten exercised considerable control over Tombstone through shareholdings held by a public company Willoughbys Consolidated PLC (Willoughbys), that assets registered in the name of Tombstone were assets in which Mr van Hoogstraten had a significant interest, that Tombstone was a company which held his assets, or over which he exercised control, and that they had now applied for the appointment of a sequestrator to remedy his contempt in failing to comply with his duty of disclosure.
20. Lightman J observed that the obvious and proper course to be taken by the Estate was to join Tombstone as a defendant. That would have avoided the problems that arose subsequently. There was no sufficient reason for not taking that step, but the Estate never took it.
21. On 2 October 2002 the Estate applied to commit Mr van Hoogstraten for contempt in not complying with the disclosure order in paragraph 9 of the freezing order. The hearing of the application on 11 October 2002 was not attended by Mr van Hoogstraten. In his absence Peter Smith J found the contempt proved and imposed a £200,000 fine suspended for 28 days pending compliance with paragraph 9. The judge ordered him to pay the costs of the hearing. The judge said that he was not prepared to entertain any application by him until he complied with paragraph 9 of the freezing order.
22. In further correspondence Healys invited Engleharts to proceed with any application by them at the next hearing in respect of the freezing order. When Mr van Hoogstraten wrote to the court protesting that he was being denied his legal right to defend the action, he was informed that he should comply with paragraph 9. He was unable to attend a hearing on 24 October for reasons beyond his control. On 31 October 2002 Mr van Hoogstraten attended before Peter Smith J. He applied to discharge the freezing order. The judge refused to entertain the application until he had complied with paragraph 9. He adjourned to a Case Management Conference an application by the Estate to strike out Mr van Hoogstraten's defence and counterclaim.
23. On 13 November 2002 the Case Management Conference took place. Mr van Hoogstraten attended. The judge rejected his application to set aside the freezing order and all subsequent orders against him. He repeated his position about refusing to entertain it until Mr van Hoogstraten complied with paragraph 9. Time for compliance was extended to 20 November 2002 with a default provision that the defence and counterclaim would be struck out and judgment entered for the Estate. He gave leave to the Estate to apply for permission to issue a writ of sequestration of the assets of Mr van Hoogstraten. The hearing was adjourned to 27 November 2002.
24. On 15 November 2002 the estate issued an application for permission to issue a writ of sequestration of the assets of Mr van Hoogstraten. Permission to issue the writ was granted by Peter Smith J on 12 December 2002 following the adjourned hearing on 9 and 10 December at which it was submitted that the affidavit of assets made by Mr van Hoogstraten was meagre and untrue. Affidavit evidence from the Estate referred to what were alleged to be his extensive property interests, an art collection and numerous bank accounts in his name or in company names.
25. Peter Smith J gave judgment on 12 December striking out the defence and counterclaim and barring Mr van Hoogstraten from defending the case. He entered judgment for the Estate with directions for all necessary accounts and inquiries. He held that Mr van Hoogstraten was in breach of paragraph 9 of the freezing order, that he was in contempt of court for failing to comply with the freezing order and that he had failed to purge his contempt because his affidavits were not true.
26. In the course of his judgment Peter Smith J stated that Mr van Hoogstraten had failed to provide in his affidavit any information about the assets of Tombstone. The conclusion drawn by him from the absence of explanation of identified matters was that "ultimately he is the beneficial owner of Tombstone Limited", noting that this was disputed by Mr van Hoogstraten (paragraph 26). The judge repeated that Tombstone belonged beneficially to Mr van Hoogstraten (paragraph 40). He added that he had assets which he had not disclosed in his two affidavits, that he had wilfully concealed his interest in other significant assets, that he had chosen "to be portrayed as a man of considerably less worth because it suits him to do so", and that his affidavit evidence was rejected as "completely untrue and incredible." The judge said that he was unable to determine fully what his other assets were, save in relation to Tombstone Limited, Hamilton Palace, the antique collection, as yet unidentified bank accounts and the hotels in Brighton and Hove (paragraphs 98 and 99). The judge did not make any formal declaration as to the ownership of any of those assets.
27. On the same day the sequestrators instructed Healys. They expressed concern to Healys that the existing form of the writ issued by the court did not give them sufficient power to seize the assets of Mr van Hoogstraten held in the name of Tombstone. As they thought that the judge intended them to have this power, they gave instructions to obtain clarification. Healys made preparations for counsel to apply to the court to amend the writ.
28. On Friday 13 December 2002 a very brief oral hearing took place before Peter Smith J. He was sitting as Applications Judge hearing urgent applications. He gave permission to issue a writ in an amended form, which was supplied to the court by counsel in support of an application to amend. He made the application on behalf of the Estate and the sequestrators.
29. The application was made without notice to either Mr van Hoogstraten or Tombstone. The judge was not supplied ahead of the hearing with any skeleton argument, draft order or other papers. The matter proceeded as if it were nothing more than a formality following, as a matter of course, from the previous day's judgment. According to the transcript counsel told the judge, in response to a query or comment by him, that he had determined that "Tombstone belonged to him [Mr van Hoogstraten] beneficially," as well as that he was a director in control of it. The writ stated (paragraph (c) of the recitals) that the court had expressly declared in paragraph 26 of his judgment on 12 December 2002 that Mr van Hoogstraten "is the beneficial owner of Tombstone Limited and its assets" and "accordingly for the purposes of this Writ of Sequestration the assets held by Tombstone Limited are to be treated as part of the real and personal estate of the First Defendant [Mr van Hoogstraten]." Healys served the amended writ on Mr van Hoogstraten.
30. Tombstone's case is quite simply that the 13 December order and the amended writ of sequestration were nullities and should be treated as such on having been set aside. They were made without notice to Tombstone, which was not party to the case or accused of any contempt of court.
31. Lightman J observed at this point that, as confirmed in evidence by Mr Englehart, who acted as solicitor for Tombstone, there was no obstacle to Tombstone making thereafter an immediate application for the discharge of the order of 13 December and with it the amended writ. For his own reasons Mr van Hoogstraten was content that Tombstone should live with the order and the amended writ.
32. The respondents' case is also simple: that the order and the amended writ were made and authorised by a judge of the High Court in the exercise of his discretion and that they were valid and effective until they were set aside for procedural irregularity, such as that Tombstone was not a party to the litigation, or by reason of breaches of duty owed to the court by the respondents and their advisers. The court order protected the respondents from personal liability for acts done under the order unless and until the court exercised its discretion to deprive them of the protection.
33. The respondents add that Tombstone was entitled to apply to the court to discharge or vary the order. It could, in particular, have applied to correct the reference in the body of the amended writ to paragraph 26 of the judgment of 12 December. It could also have applied for an immediate stay on the sequestration affecting what it claimed were its own assets pending the decision of the court or of any appeal.
34. Further, there was no reason to suppose that the judge would have refused to allow Tombstone's intervention in the action, which, as it knew, would not have met with any opposition from the respondents, who had served notice of the original application for an order for sequestration on Tombstone in September 2002.
35. Mr van Hoogstraten was in possession of the amended writ by the evening of 17 December. The sequestrators had sent a copy of it to Engleharts (Tombstone's solicitors) on 16 December. As the judge also found (see below) Mr van Hoogstraten knew that the 13 December Order was wrongly made and would be set aside on appeal, but he decided not to challenge the sequestration of Tombstone's assets at that time.
36. Further, the respondents submit that Tombstone could and should have applied to have the amended writ set aside for various other procedural flaws at the latest by the time that Mr van Hoogstraten, who made decisions on Tombstone's behalf, was himself applying to set aside the amended writ on the grounds of procedural error.
37. At a further hearing on 18 December 2002 to work out the terms of the order Mr van Hoogstraten was represented by counsel (Mr Reza), as was the Estate. Mr van Hoogstraten's application for a stay of the sequestration was refused, as was his application for permission to appeal. Time was extended for filing a notice of appeal. At the hearing on 18 December no reference was made at all to the application to amend or to the amendment order made by the same judge only five days previously. No attempt was made by Mr van Hoogstraten or Tombstone to take advantage of the opportunity to apply to set aside the amended writ. In the course of the hearing the judge made it clear that his findings were that Mr van Hoogstraten was the beneficial owner of Tombstone, Hamilton Place, eight hotels and £200m worth of antiques. In letters of 20 and 23 December Engleharts, on behalf of Tombstone, stated that the sequestration covered only the assets of Mr van Hoogstraten and Tombstone and did not extend to property which was believed to belong to Tombstone but did not in fact do so.

2003

38. On 10 January 2003 the solicitors for Tombstone and Mr van Hoogstraten wrote to the sequestrators requesting payment by them of corporation tax and trade debts owed by Tombstone. They wrote again on 27 January 2003. On 31 January the sequestrators' solicitors, Dechert, issued and served an application for directions, including permission to sell certain properties held in the name of Tombstone. On 4 February the Estate issued and served an application relating to a property at Brook Terrace, Bilston which was registered in the name of Tombstone. On 7 February Mr Englehart wrote to Healys and Dechert saying that whilst he had acted in the past for Tombstone he was not instructed to represent it, but that he would be acting without any conflict for Willoughbys as an interested party. As it claimed to own 50% of the shares in Tombstone it was concerned about the effect of the sequestration order upon its shareholding.
39. It was at about this time that Mr van Hoogstraten changed his mind on the need to take action about the amended writ in the light of the sequestrators' application for permission to realise Tombstone's assets. In addition to an application by the sequestrators to sell properties held in the name of Tombstone, there was an application by the Estate, consequent on having struck out Mr van Hoogstraten's defence and having obtained a judgment against him, for the transfer of the Brook Terrace property. Instead of taking the obvious step of applying to join Tombstone, Mr van Hoogstraten decided that Tombstone would not attend the directions hearing or intervene. Instead, Willoughbys, who claimed to hold 50% of the shares in Tombstone, would attend and apply to intervene. Engleharts would act for them rather than for Tombstone.
40. On 10 February 2003 the directions hearing was heard by Peter Smith J. The Estate, the sequestrators, Mr van Hoogstraten and Willoughbys were all represented by counsel. Tombstone did not appear and was not represented. The judge made an order conferring power on the sequestrators to sell assets in the name of Tombstone to realise £1.25m. He also directed that steps should be taken to effect a transfer of Brook Terrace to the Estate. During the course of the hearing the judge said that the sequestrators had been appointed over the assets of Tombstone to realise them, as he had found as a fact that Tombstone belonged beneficially to Mr van Hoogstraten. On 27 February the judge refused an application by Mr van Hoogstraten for permission to appeal against the order of 10 February authorising sales.
41. On 17 February Willoughbys had made an application to be joined as a defendant for the purpose of preventing the sale of the Tombstone properties, to have the question of Mr van Hoogstraten's interest in the properties determined by the court and to have Tombstone's assets discharged from the sequestration. The application was supported by a witness statement of Mr Englehart. Willoughbys wanted the earlier orders of Peter Smith J cancelled so far as they affected Tombstone and to prevent sales and transfers of properties owned by Tombstone. The judge directed the application to be heard on 19 March. He ordered that no contract of the sale of Tombstone properties should be exchanged until after the determination of Willoughbys' application.
42. On 14 March Ms Rosemary Hamilton, who is Mr van Hoogstraten's former partner, mother of one of his sons and holder of 30% of the shares in Tombstone, made an application to be joined as a defendant for the purpose of protecting the assets of Tombstone. A week previously she had been appointed by Mr van Hoogstraten as an additional director of Tombstone. She wished to challenge the finding that Mr van Hoogstraten beneficially owned the assets or shares in Tombstone. She asked to be permitted to represent the interests of Tombstone and all of its shareholders other than Mr van Hoogstraten. She objected to the sale of Tombstone's assets to pay off his debts.
43. Both of the applications for joinder (Willoughbys and Ms Hamilton's) were heard by Peter Smith J on 19 March 2003. On 3 April he gave judgment dismissing both applications. During the hearing the judge pressed each counsel for the applicants and counsel for Mr van Hoogstraten for an explanation why Tombstone had not applied to be joined and made clear his view that, in the absence of an explanation, the decision not to bring in Tombstone as a party was deliberate. He drew attention to this in his judgment. He was not given an explanation. He referred to "lifting the corporate veil" and to Mr van Hoogstraten and Tombstone as being "the same thing." He held that Willoughbys and Ms Hamilton did not own shares in Tombstone and that, even if they did, the ultimate beneficial owner of the shares was Mr van Hoogstraten.
44. On 4 April 2003 Tombstone's board passed a resolution to instruct Turner & Debenhams to act as its solicitors and to start proceedings to protect its assets and to intervene in the main action, but nothing was done about it until June 2003.
45. On 13 June 2003 the Court of Appeal heard a number of applications. It granted Mr van Hoogstraten permission to appeal from the finding of contempt and the ensuing orders extending from the freezing order to the sequestration orders (12 December 2002 and 10 February and 3 April 2003). The Court refused a stay on the proposed sales by the sequestrators and dismissed Willoughbys' application for permission to appeal from the dismissal of its application to be joined. During the hearing the court asked for, but was not given, an explanation as to why Tombstone had not made the application for joinder. An application for joinder, for a declaration that it was the sole beneficial owner of named properties and for a stay of sales was issued on 25 June returnable on 26 June 2003.
46. On 27 June 2003 the Court of Appeal granted Tombstone, represented by Engleharts, permission to appeal against the dismissal by Peter Smith J earlier the same day of its application to be joined. The judge had held that it was an abuse of process. Chadwick LJ refused an application for a stay on the sale of properties on the ground that a deliberate decision had been made in February 2003 that the intervention should be made by Willoughbys and Ms Hamilton, and that the current application could have been made by Tombstone many months previously. There was no explanation for the last minute application.
47. On 4 July 2003 the Court of Appeal refused to grant permission to Ms Hamilton to appeal against the order of Peter Smith J refusing her application to intervene in the proceedings.

2004

48. The appeals were not heard until the summer of 2004, having been adjourned on 12 November 2003 on terms that no claim would be made for the diminution in the assets of Tombstone over the period of the adjournment. On 21 July 2004 the Court of Appeal allowed, with costs, Mr van Hoogstraten's appeal against Peter Smith J's finding of contempt on the ground that the finding had been wrongly made. The Court set aside the sequestration order, along with the order and amended writ of 13 December 2002. The Court of Appeal did not consider whether the amended writ could be challenged on any other ground, such as procedural irregularity. The writ and the amendment order were set aside consequential on the finding of contempt being set aside. Tombstone's appeal fell away with those orders. The court remitted to the Chancery Division the question whether Mr van Hoogstraten or Tombstone were entitled to damages arising out of the making of the orders.

2005

49. Tombstone began these proceedings against the Estate in August 2005. The claims for compensation for sequestration and management costs were based on the cross undertaking in the freezing order and on the alleged implied cross undertaking in the sequestration order. At that stage it was not alleged that the 13 December order and the amended writ were irregularly made or issued. Indeed, the alleged liability on the cross undertakings appears to assume the validity of the orders and other steps in question.
50. The respondents' position was that, throughout all of the proceedings, everybody (they, the sequestrators, the van Hoogstraten parties and their respective advisers and, indeed, the courts themselves) proceeded on the basis that (a) Peter Smith J had decided that Tombstone's assets were owned by Mr van Hoogstraten; (b) he had intended to include them within the scope of the van Hoogstraten sequestration; and (c) the 13 December order and amended writ were validly (albeit, on the Hoogstraten parties' case, wrongly) made and issued.
51. Mr van Hoogstraten resigned as a director of Tombstone on 11 November 2005. He subsequently abandoned his claim for compensation.

2006

52. In March 2006 Tombstone amended its particulars of claim. It introduced the claim that the initial order appointing sequestrators and the amendment order were nullities, or were irregularly obtained, with the result that the Estate was liable for the torts of trespass and conversion. Healys were joined as an additional defendant by order of Lightman J. The claims for damages for trespass and conversion were set out in section G of the Particulars of Claim. Lightman J gave directions for trial of the issue of liability as the first stage of the proceedings for damages pursuant to the Court of Appeal remission and the re-amended particulars of claim.

C. LIABILITY

Findings

53. Tombstone does not appeal against the findings of fact made by Lightman J after hearing evidence at a trial lasting 10 days. The witnesses for Tombstone included Mr van Hoogstraten and Mr Englehart. He also heard oral evidence from the son of Mr Raja responsible for the conduct of the litigation
54. Lightman J found as a fact that Mr van Hoogstraten knew that the 13 December order and the amended writ were wrongly made and issued and that they would be set aside by the Court of Appeal. The judge also found that Mr van Hoogstraten did not regard the order and the amended writ as very important. He was content for them to continue in force unchallenged. As he saw it, the orders preserved the assets sequestered and did not interfere with the conduct of Tombstone's business. His attitude towards the freezing order itself was similar. He was not anxious to retrieve either his or Tombstone's assets from the sequestrators until he learnt that the sequestrators intended to sell assets and recoup their expenditure, remuneration and costs out of the proceeds.
55. Although Lightman J did not regard Mr van Hoogstraten as a witness of truth he concluded that this evidence was credible and that he should accept it. He thought that the view taken by Mr van Hoogstraten was plainly correct. He said that Mr van Hoogstraten was an intelligent and very experienced litigant. He was in a position to appreciate the injustice of the procedure adopted to obtain the order of December 13. The judge noted that in his evidence Mr Englehart took the same view of the unimportance of that order.
56. The judge found that at all times Mr van Hoogstraten had access to legal advice and representation for himself and for Tombstone, in particular from Mr Englehart. There was more than ample funding available to obtain both. The judge found that Engleharts had standing instructions to act for Tombstone. All of Mr Englehart's instructions came from Mr van Hoogstraten. There was never an occasion when Mr van Hoogstraten could not obtain legal representation if he wanted it. He used different firms of solicitors on other occasions: Minaides Robson acted in the freezing order and sequestration and he arranged for Turner & Debenhams to act for Ms Hamilton. Lightman J concluded that he always gave anxious consideration to whether it suited his and Tombstone's interests and whether it was tactically advantageous to be legally represented and decided accordingly.
57. Lightman J found as a fact that the attitude adopted by the Estate in the litigation against Mr van Hoogstraten, and, in particular, in respect of the application for the amended writ, was one of caution. If there had been any appreciation of a risk that the 13 December order might be challenged on any grounds the Estate would immediately have sought the guidance of the court and taken all necessary steps to eliminate risk of any personal liability.

Rulings

58. On the basis of his findings Lightman J made rulings which can be conveniently summarised as follows-.

(1) In favour of Tombstone he found potential secondary legal liability on the part of the respondents. They could be held legally responsible for any acts of trespass and conversion by the sequestrators, even though the sequestrators themselves were personally immune from liability.

(2) Although the 13 December 2002 order and the amended writ were not nullities, the process by which the amended writ was issued was seriously flawed by reason of irregularities.

(3) The irregularities took the form of the respondents' misrepresentations, non-disclosures and breaches of duty to the court which exposed the order and the amended writ to challenge.

(4) The court had a discretion under the CPR to withdraw retrospectively the protection otherwise afforded to the respondents by the court order.

(5) Tombstone was not precluded from making an application for damages against the respondents by reason only of the fact that the order of December 13 and the amended writ had not been set aside on grounds of irregularity. The Court of Appeal had set aside the amended writ consequent on reversing Peter Smith J's finding of contempt against Mr van Hoogstraten.

(6) The court ought not to exercise its discretion in favour of withdrawing the protection of the court order and the defence of judicial authority. The judge's reasoning is fully set out below.

(7) The tort claims must accordingly fail. The court order protected the respondents from liability for acts committed while the order was in force.

(8) Tombstone's tort claims against the respondents were also an abuse of process and should be struck out.

(9) The claims against the respondents also failed on the ground that Tombstone had no arguable case that it had suffered recoverable loss and damage.

Discretion

59. At the heart of this appeal is Tombstone's attack on the judge's exercise of the discretion not to set aside the 13 December Order and the amended writ under the CPR. The judge gave concise reasons for the exercise of the discretion. As they have been extensively analysed in Tombstone's written and oral submissions they should be quoted in full.

"79. I have no doubt that in the quite exceptional circumstances of this case in the exercise of my discretion I should decline to withdraw the protection. My reasons for so deciding can be shortly stated as follows: (1) it should have been plain to any competent lawyer, with any knowledge or experience of litigation (and accordingly any such lawyer instructed by Tombstone) that: (a) the December 13^th Order had been irregularly obtained, for it had been obtained for no apparent or sufficient reason on a without notice application against a non-party to the proceedings against whom there had never been any application of contempt and in contravention of RSC Order 46,5(2), and accordingly the order would practically as a matter of course on any prompt application be set aside on this ground; and (b) in any event at any time, since the order was made on a without notice application, Tombstone could apply for its discharge on the merits, on a full hearing; (2) Tombstone (through Mr van Hoogstraten) at all times knew (but the Defendants did not know) that the December 13^th Order could and would be set aside by the Court of Appeal. If Tombstone had challenged the Order forthwith (as any ordinary litigant would have done) there would have been an early finality in this litigation: the December 13^th Order and the Amended Writ would have occasioned Tombstone no damage or loss. Instead, not merely was Tombstone content that the December 13^th Order and the Amended Writ should remain in force until the Sequestrators applied for power to sell the Properties, but through Engleharts Tombstone requested the Sequestrators to pay tax and trade debts owed by Tombstone. When the Sequestrators did apply to sell the Properties, instead of making any challenge, for no good or sufficient reason, Tombstone left the making any challenge to others who had no locus standi to make it. Tombstone was accordingly in a very real sense the author of the loss in respect of which it seeks the lifting of the protection afforded to the Defendants by the orders and for which it claims relief in this action; (3) an application to discharge the December 13^th Order and set aside the Amended Writ and (in default) for permission to appeal could and should have been made at the hearing on 18^th December 2002. At that hearing at which Mr van Hoogstraten was represented by Mr Reza, matters arising from the December 2002 Judgment including the form of order and the grant of permission to appeal were on the agenda and dealt with. Tombstone however of which Mr van Hoogstraten was the "corporate embodiment", for its own reasons absented itself and took no action: (4) though the Sequestrators did their best in early February 2003 to prompt Tombstone to be represented at the first hearing of their application for power to sell properties in the name of Tombstone and though Mr van Hoogstraten was represented by counsel Tombstone for their own reasons declined to be represented. The (ultimately successful) application by the Sequestrators for directions authorising the sale of the Properties was the occasion (if not earlier made) for a challenge to the December 13^th Order on this ground; for the claim to relief sought by the Sequestrators proceeded on the basis that the December 13^th Order was valid and regularly made. Tombstone stood by whilst futile applications to intervene were made at the instance of Mr van Hoogstraten by Ms Hamilton and Willoughbys and made no application at all to the court until the 25^th June 2003 and no application on the ground of irregularity until March 2006. So far as reliance as an excuse for this and other actions and delays is placed on the alleged hostility of the Judge to Mr van Hoogstraten and his identification of Tombstone with Mr van Hoogstraten, it is appropriate to have in mind the words of Lord Hoffmann in Arthur S Hall v. Simons [2002] 1 AC at 699:

"Whatever may have been the foibles of the Judge who heard the case it cannot be assumed that he would have behaved irrationally. If he did it would have been corrected on appeal."

(5) the application by Tombstone to the Court of Appeal for permission to appeal against the Judge's refusal of permission to intervene was again the occasion to raise any allegation of irregularity, but the allegation of irregularity was only advanced as late as March 2006; and (6) throughout the intervening period the Defendants proceeded on the basis that, whether or not on its merits the December 13^th Order should have been made, there was no question of any irregularity which might defeat the protection otherwise afforded to those who procured the Order and secured compliance with it. As Amjad told me in his evidence and I fully accept, any hint of irregularity would have prompted the Estate to make an application to the court for resolution of the issue.

80. In a word I am firmly of the view that in all the circumstances of this case it would be unjust and indeed oppressive to the Defendants to accede to Tombstone's last minute and surprise application to spring upon the Defendants an order depriving them of the protection on which they could reasonably rely over the protracted period since 13^th December 2002."

CPR discretion or inherent jurisdiction?

60. The primary issue of law on the appeal is whether the judge was wrong in concluding that he had a discretion under the CPR to decide whether or not the respondents should lose the protection of the order of 13 December for alleged tortious acts committed while the order was in force.
61. Could Tombstone have made an application under the CPR to set aside the order made by Peter Smith J on 13 December 2002? In our view, such an application could have been made under rule 23.10. In interpreting the CPR, the court "must seek to give effect to the overriding objective [of enabling the court to deal with cases justly]": see rule 1.2(b).
62. Rules 23.9 and 23.10 must be read together. Rule 23.9 provides:

"23.9 (1) This rule applies where the court has disposed of an application which it permitted to be made without service of a copy of the application notice.

(2) Where the court makes an order, whether granting or dismissing the application, a copy of the application notice and any evidence in support must, unless the court orders otherwise, be served with the order on any party or other person –

(a) against whom the order was made; and

(b) against whom the order was sought.

(3) The order must contain a statement of the right to make an application to set aside or vary the order under rule 23.10."

63. Rule 23.10 provides:

"23.10 (1) A person who was not served with a copy of the application notice before an order was made under rule 23.9, may apply to have the order set aside or varied.

(2) An application under this rule must be made within 7 days after the date on which the order was served on the person making the application."

64. Mr Nigel Jones QC submits on behalf of Tombstone that an application could not have been made by Tombstone to set aside the order of 13 December under rule 23.10, because the order had not been made in response to an application supported by an application notice. He says that an order pursuant to rule 23.9 can only be made where an application notice has been issued, but not served, before the order is made and that rule 23.10(1) only applies in relation to an application notice made pursuant to rule 23.9 before the order is made: note the words "a copy of the application notice" in rule 23.10(1) (emphasis added).
65. On a literal interpretation of the rules, we can see some force in this argument. But we cannot accept it, because it does not give effect to the overriding objective of enabling the court to deal with cases justly. Mr Jones has suggested no reason why the rules should provide that an application to set aside an order made without notice can be made if the order is made pursuant to an application notice; but that an application to set aside cannot be made if the order is made pursuant to an application which is not supported by an application notice. Such a distinction makes no sense. The purpose of rule 23.9 is to require a party affected by an order made without notice to be made aware of the order so that he can comply with it or (as the case may be) apply to have it set aside. No doubt, in most cases, such an application will be made pursuant to a written application notice. But sometimes, for example in cases of urgency, an application is made orally unsupported by a notice.
66. As the headings make clear, the subject-matter of rules 23.9 and 23.10 is applications made without notice. We accept the submission of Mr Andrew Onslow QC on behalf of Healys, that these rules assume, but do not require, that the order is made pursuant to an application notice. The core element of the rules is that the party affected by the order made without notice should be notified of the order that has been made. In our view, rules 23.9 and 23.10 should be construed as applying whether or not an application notice has been issued.
67. In these circumstances, we do not have to decide whether, if there is a lacuna in rules 23.9 and 23.10, resort can be had to rule 3.1(2). This provides that "Except where these Rules provide otherwise, the court may……..(m) take any other step or make any other order for the purpose of managing the case and furthering the overriding objective". We are in no doubt that the court has power under rule 3.1(2)(m) to make an order without notice affecting a party to the litigation where an application is made unsupported by an application notice. Mr Jones submits, however, that Tombstone could not have applied to the court to invoke this power because on 13 December Tombstone was not a party to the litigation. He contends that rule 3.1(2)(m) is concerned with the case management of litigation by taking steps and making orders that affect the parties to the litigation: it cannot be invoked to take steps or make orders in relation to non-parties. We see force in this submission, but it is unnecessary to decide the point.
68. We conclude, therefore, that Tombstone could have applied to have the order made on 13 December set aside under rule 23.10. In dealing with such an application, the court would have been required to give effect to the overriding objective. We explain at paragraph 81 below what that entails by reference to Nelson v Clearsprings (Management) Ltd [2006] EWCA Civ 1252, [2007] 1 WLR 962. But, before we come to that decision, we need to deal with the submission of Mr Jones that, whatever the position may be under the CPR, where an order is made without notice, the party affected is entitled as of right (ex debito justitiae) to have the order set aside under the inherent jurisdiction of the court.
69. He submits as follows. The position pre-CPR was that a person affected by an order made without notice was entitled as of right to have the order set aside under the inherent jurisdiction of the court. No exercise of discretion was involved. He cited a number of authorities to us. We do not propose to refer to them all. In Isaacs v Robertson [1985] 1 AC 97, giving the judgment of the Privy Council, Lord Diplock said at p 103C that there is a category of orders of a court of unlimited jurisdiction which a person affected

"..is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make."

70. Lord Diplock noted that judges had refrained from laying down a comprehensive definition of defects that bring an order into the category "that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natural justice."
71. In St George's Healthcare NHS Trust v S [1998] 1 WLR 936, hospital authorities applied ex parte and were granted a declaration which dispensed with the applicant's consent to medical treatment. Her appeal was allowed. This court said (p 965F) that a declaration (especially one affecting an individual's personal autonomy) ought not to be made on an ex parte basis, not least because it would be ineffective to achieve its purpose of protecting the doctor or doctors who administered the treatment from claims. The court cited the passage from the judgment in Isaacs v Robertson to which we have referred and said of the declaration that it was an order which the applicant

"..is entitled to have set aside ex debito justitiae. That may involve some unfairness to the doctors and nurses at St George's……But the unfairness (indeed injustice) to M.S. would be much greater if the order were not set aside."

72. In In re Pritchard, deceased [1963] Ch 502, 520-521 Upjohn LJ said that the phrase ex debito justitiae meant that "the plaintiff is entitled as a matter of right to have it set aside". He then explained what this meant in the following way:

"….. Let me quote an analogy. The right to wind up a company is by statute a discretionary right. Yet the books and authorities point out that in many cases as against the company an unpaid creditor on a winding-up petition is entitled to a winding-up order ex debito justitiae. This means no more than that, in accordance with settled practice, the court can only exercise its discretion in one way, namely, by granting the order sought. So in many of the cases where there are defects of procedure, even if the defects are mere irregularities for the purposes of Ord. 70 so that the court has a discretion, it must follow that the applicant, if he is in no wise estopped by conduct or waiver, is entitled to say: I am entitled under Ord. 70 to have the order made upon me set aside ex debito justitiae. Indeed, the only difference between a nullity and an irregularity, to which such a principle applies, is where, being a nullity, it is too late to start again."

73. We accept the submission of Mr Onslow that the right to apply to have an order set aside (for whatever reason) can be lost, for example, by waiver or estoppel. But subject to that, we are content to proceed on the basis that in the pre-CPR era, a party affected by an order made without notice was entitled to have the order set aside in the sense explained by Upjohn LJ. That is to say, it was an exercise of discretion by the court in accordance with settled practice which had to be exercised in favour of setting the order aside unless the right was lost. It was not an exercise of discretion which involved a more general consideration of what was required by the interests of justice, having regard to all the circumstances of the case.
74. The relationship between the inherent powers of the court to control proceedings and the Rules of the Supreme Court was considered by Sir Jack Jacob in his Hamlyn lecture "The inherent jurisdiction of the court": Current Legal Problems 1970 p 23, 50-51. He said that the powers of the court under its inherent jurisdiction "are complementary to its powers under Rules of Court; one set of powers supplements and reinforces the other…..where the usefulness of the powers under the Rules ends, the usefulness of the powers under inherent jurisdiction begins." In an illuminating article entitled "The inherent jurisdiction to regulate civil proceedings" [1997] LQR 120, the late Professor Martin Dockray said at p 128 that the Rules of the Supreme Court may limit the inherent powers of the court where there is a conflict between them. Thus "the inherent jurisdiction may supplement but cannot be used to lay down procedure which is contrary to or inconsistent with a valid Rule of the Supreme Court". In our judgment, this last statement was correct in law, being supported by the authorities cited in the article which included Moore v Assignment Courier Ltd [1977] 1 WLR 644F-645B and Langley v North West Water Authority [1991] 1 WLR 697, 709D.
75. In our view, the correctness of this view is not put in doubt by the authorities relied on by Mr Jones. We do not consider that in Isaacs v Robertson, Lord Diplock was intending to say that the inherent jurisdiction of the court could be invoked to make an order which was inconsistent with the rules. In any event, the ratio of the decision was that an order made by a court of unlimited jurisdiction had to be obeyed until and unless it was set aside. What Lord Diplock said about the relationship between the court's inherent jurisdiction and its powers under the rules was not necessary for the decision and was obiter dictum. It is true that in the St George's Healthcare case, reference was made to what Lord Diplock said in Isaacs v Robertson. But there are two reasons why that decision cannot bear the weight placed on it by Mr Jones. First, one of the reasons why the court concluded that the order should be set aside ex debito justitiae was that it was an interim declaration which was of no effect. Secondly, there was no consideration of the question whether the order should be set aside under the rules rather than in the exercise of the court's inherent jurisdiction. No doubt, the result would have been the same whether under the rules or under the inherent jurisdiction of the court.
76. The position pre-CPR, therefore, was that the inherent powers of the court could not be invoked to do something which was inconsistent with a rule. Thus, if a rule gave a wide discretion to the court to decide whether or not to make a particular order, the court could not exercise its inherent powers to make such an order ex debito justitiae as if it had no discretion, or a discretion which could only be exercised one way in accordance with the rules.
77. The same position has obtained since the introduction of the CPR. The CPR are a "new procedural code with the overriding objective of enabling the court to deal with cases justly" (rule 1.1(1)). There is no doubt that the court continues to have the inherent jurisdiction to regulate the conduct of civil litigation: see section 19(2)(b) of the Supreme Court Act 1981. The existence of the inherent jurisdiction is also implicitly acknowledged by CPR 3.1(1) which provides that the list of powers in that rule "is in addition to….any powers it may otherwise have".
78. In our judgment, therefore, where the subject-matter of an application is governed by rules in the CPR, it should be dealt with by the court in accordance with the rules and not by exercising the court's inherent jurisdiction. There is no point in exercising the court's inherent jurisdiction if that would involve adopting the same approach and would lead to the same result as an application of the rules. And it would be wrong to exercise the inherent jurisdiction of the court to adopt a different approach and arrive at a different outcome from that which would result from an application of the rules.
79. This approach is consistent with, if not dictated by, what this court said in Nelson. In that case, a possession order was obtained without notice to the defendant. The defendant applied to have the order set aside on the grounds that the claim form had not been served on it and it was unaware of the proceedings. The district judge held that the defendant was not entitled to have the judgment set aside as of right, but had to establish pursuant to rule 39.3(5) that it had a reasonable prospect of success at trial. The judge allowed the defendant's appeal, holding that rule 39.3(5) had no application and that, applying the guidance in White v Weston [1968] 2 QB 647, the defendant was entitled to have the judgment set aside as of right. The claimant appealed to the Court of Appeal.
80. Giving the judgment of the court, at [42] Sir Anthony Clarke MR agreed with the judge that rule 39.3(5) did not apply and said that "the appeal must be dismissed on this basis". He said that it did not, however, follow that under the CPR the defendant "was entitled to have the judgment set aside as of right, ex debito justitiae or indeed that, if there is a discretion, it can be exercised in only one way" [43]. Later, he said:

"48 …..While it is perhaps possible that there is no rule of the CPR which governs an application to set aside such a judgment and that the court's power to do so stems from some more general power to set aside a judgment ex debito justitiae, it seems unlikely that such a comprehensive code does not cover such a situation. We would hold that the attempted service at the wrong address was an error of procedure within the meaning of rule 3.10. The court is therefore empowered to make an order to remedy the error, and if rule 3.10 (b) was not thought strong enough to give the court power to make an order to the effect that an irregular judgment should be set aside, the necessary power is available under rule 3.1(2)(m). We do not consider it necessary to consider the vexed question whether the word order is wide enough to include judgment in rule 3.1(7): for the problems created by the distinctions between judgments and orders in the CPR see volume 1 of the White Book 2006 at paragraph 40.1.1.

49. On such an application, in construing the CPR, it is not in our judgment appropriate to hold, on the true construction of the wide and unfettered discretion given by those two rules, that the discretion to set aside an irregular judgment can only be exercised in one way, namely by setting aside the judgment. There may be circumstances in which the overriding objective of dealing with cases justly, which of course expressly includes, by rule 1.1(2), saving expense and dealing with the case in ways which are proportionate, requires the discretion to be exercised differently.

50. That is not to say that on an application to set aside a judgment in a case of this kind the just order will not almost always be to set aside the judgment.

…..

However, each case depends upon its own facts and there may be circumstances in which it will not be appropriate to set aside the judgment, or at any rate, the whole judgment, as for instance when the defendant has delayed inexcusably in making his application to the court after learning that the judgment had been entered against him."

81. We do not accept the submission of Mr Jones that what the court said from [43] to the end of the judgment is obiter. Having agreed with the judge that rule 39.3(5) did not apply, the court went on to consider whether the judge was right to set aside the judgment. They concluded that he was. But what they said in support of that conclusion forms part of the reasoning of the decision.
82. That reasoning is relevant to the present appeal in two respects. First, it is implicit in [48] that, if there is a rule of the CPR which governs an application to set aside such a judgment, the application should be dealt with pursuant to the rule and not by exercising "some more general power to set aside a judgment ex debito justitiae". Secondly, an application under the rules to set aside a judgment obtained without notice involves an exercise of a discretion to produce a just result. Although an application to set aside such an order will almost always succeed, each case depends on its own facts. The crucial point is that the court should arrive at a just result.
83. It may well be that in the pre-CPR era, an application to set aside a judgment (or similarly crucial order) made without notice would have succeeded in all cases, unless the right was lost by waiver or estoppel. This was because a defendant who was the subject of a judgment of which he had no notice was entitled to have it set aside as of right on the basis that the defect was so fundamental: see White v Weston p 659.
84. Since the introduction of the CPR, however, the position is that applications for the setting aside of orders made without notice are governed by rule 23.10. They are determined by the court exercising the discretion given by that rule in accordance with the overriding objective. Where the order is one which affects the rights of the affected party in an important respect (a judgment is the most obvious example), it will only be in exceptional circumstances that the discretion will not be exercised to set aside the order.
85. We would add that if, contrary to the view we have expressed above, Tonbstone's application to set aside fell outside the scope of the CPR and had to be dealt with under the inherent jurisdiction of the court, we would have held that the jurisdiction should be exercised conformably with the CPR. The CPR introduced a new code. It was intended to be comprehensive. If there is a lacuna, the omission should be made good in a way which is consistent with the rules. Our procedural regime would be incoherent if an application to set aside a judgment pursuant to the CPR involved the exercise of a discretion in accordance with the overriding objective, but an application outside the rule involved the exercise of a narrower discretion or no discretion at all.

Exercise of CPR discretion

86. The next question is whether the judge properly exercised his discretion under the CPR by declining to deprive the respondents of the protection of the 13 December order.
87. Tombstone submits that the exercise of discretion by this very experienced judge was flawed in a number of respects. No precedent authority is needed for the proposition that this court will only interfere with the exercise of a judicial discretion if it is contrary to legal principle, or if it has been reached by ignoring relevant factors or influenced by irrelevant factors, or if for some other reason it is plainly wrong.
88. Mr Nigel Jones QC submits that the reasons given by Lightman J do not justify the exercise of his discretion not to remove from the respondents the legal protection of the 13 December order. Although we shall deal separately with each point in turn as advanced by Tombstone and answered by the respondents, it is important not to lose sight of the overall picture that emerges from the combination of the judge's findings of fact, which are not challenged on appeal, and the indisputable chronological sequence of events set out earlier.

Knowledge of 13 December order

89. Mr Jones submits that the judge was wrong to hold that, from a time shortly after 13 December 2002, Tombstone (through Mr van Hoogstraten) knew that there had been a hearing on that date and knew of the specific procedural defects in obtaining the amended writ.
90. The position is that Healys had in fact informed Mr van Hoogstraten in a letter of 13 December 2002 that the judge had approved the amended writ. What Lightman J found as a fact and has not been appealed is that Mr van Hoogstraten, on his own evidence, was aware that, without notice to Tombstone, the sequestrators had been appointed over his assets held in the name of Tombstone. He knew, as he said in evidence, that the appointment was wrong and that it would be reversed on appeal. Although Mr van Hoogstraten may not have known the details of what happened on 13 December or of the specific procedural errors, he (and therefore Tombstone) was aware of the substance of the outcome of the application to amend the writ.

Knowledge of defects in 13 December order

91. Mr Jones submits that the judge was wrong to hold that Tombstone should have known of the defects in the procedure by which the amended writ was obtained and that they should have been obvious to any competent lawyer. He points out that none of the lawyers involved actually appreciated the procedural defects at the time.
92. As already mentioned what Lightman J found was that Mr van Hoogstraten knew that the December 13 order was wrong and that it would be set aside on appeal. As passages in the transcript make clear Mr van Hoogstraten said that he knew that, on the facts of the case, Tombstone would eventually succeed. He said that what Peter Smith J had done on 13 December was illegal and that he had made a judgment that would not stand up in the Court of Appeal.
93. Because of the irregular procedure, Tombstone had a right to apply to discharge the order which had been made at a hearing not notified to Tombstone and at which it was not present. In our judgment, it is irrelevant to Mr van Hoogstraten's relevant state of knowledge and belief about the 13 December order and Tombstone's failure to apply to the court that the respondents' lawyers believed that the 13 December order was valid. They believed that, as the judge held, Mr van Hoogstraten was in contempt of court and that the amended writ reflected the judge's intention to include within the sequestration order assets which he had said were Mr van Hoogstraten's, even though held in the name of Tombstone.

Respondents' responsibility

94. Lightman J is criticised for not taking sufficient account of the respondents' responsibility for the defects in the procedure followed on 13 December.
95. In our judgment, this is simply not the case. The judge was highly critical of the respondents' conduct and the procedure that was followed on the application for the amendment and he clearly took that factor into account in deciding that Tombstone should not have to pay all of the respondents' legal costs.

Earlier application by Tombstone

96. Fourthly, it is submitted that the judge was wrong to hold that Tombstone could and should have applied to the court earlier in relation to the 13 December order and that, by not doing so, it was the author of its own misfortune in respect of the sequestration.
97. In our judgment, that was a highly relevant factor. The point is that there was no good reason for Tombstone not to make the application in December 2002 or in early 2003. There were no difficulties in Tombstone funding an application and it had access to legal advice and representation. Unsuccessful applications to the court were made by Willoughbys and Ms Hamilton. There was no satisfactory explanation for Tombstone's failure to make an earlier application.

Judicial treatment

98. Fifthly, Mr Jones submits that the judge failed to take account of all the relevant circumstances, in particular Peter Smith J's previous treatment of Mr Hoogstraten and the other applicants and the explanation for Tombstone's conduct in not making the application earlier provided by that judge's attitude. It is submitted that these matters led Mr van Hoogstraten to believe that Tombstone would not get fair treatment from the judge and so he had not acted earlier.
99. In our judgment, Lightman J addressed this point and dealt with it correctly. Even if it is assumed in Mr van Hoogstraten's favour that he believed that Tombstone would not get a fair hearing, that was not a satisfactory excuse for failing to make an application to the court earlier. If the application was made and it was considered that the hearing was unfair there was the possibility of an appeal.
100. It is also contended that the judge failed to take account of Mr van Hoogstraten's ignorance of the effect of the sequestrator's lien as his reason for not acting earlier on the amended writ. Mr Onslow's comment is that this is a new excuse relied on for not having acted earlier. We agree. It was not mentioned by Mr van Hoogstraten in his evidence and he had not said that he would have acted differently had he known.

Relevant factors mis-stated

101. Sixthly, it is submitted that the judge incorrectly stated relevant factors.
102. This general criticism overlapped with other aspects of the judge's reasons for the exercise of his discretion, such as his finding that any competent lawyer would have appreciated that Tombstone could apply to the court to set aside the 13 December order. The submission repeated the points that Mr van Hoogstraten was not aware of the details of what happened on 13 December and that none of the lawyers appreciated the procedural defects at the time, acting in the belief that Peter Smith J had found that Mr van Hoogstraten owned Tombstone's assets and intended to include them in the sequestration. We have already dealt with these points.

Prejudice to respondents

103. Seventhly, Mr Jones submits that the judge was not justified in the finding of prejudice to the respondents. It was emphasised that the damage was suffered by Tombstone at an early stage of the making of the order.
104. In our judgment, the judge was entitled to find that, until March 2006, the respondents proceeded on the basis that there was no question of any irregularity in the obtaining of the 13 December order which might defeat their protection. The judge expressly accepted evidence on behalf of the Estate that any hint of irregularity would have prompted the Estate to apply to the Court for resolution of the issue. It was reasonable for the respondents to rely on the order, which they believed had been regularly made and reflected the judge's intentions. The fact that any damage suffered by Tombstone was at an early stage was not relevant to the oppression of or prejudice to the respondents, who could have been liable for a substantial sum even if the irregularity had been raised earlier.
105. In our judgment, it was reasonable for the respondents to rely on the 13 December order and to believe that it was valid and would not lead to them being personally liable. Mr van Hoogstraten had himself treated the amended writ, which is now said to have been a nullity, as valid by applying to the sequestrators early in 2003 for payment of debts and taxes.

Other points

Abuse of process

106. Lightman J said that, in view of his decision on the discretion point, it was unnecessary for him to decide whether Tombstone was also precluded from obtaining relief on the ground that its application was an abuse of process. He said (paragraph 81) that it was sufficient to say that (if necessary) he would hold that Tombstone's application to remove the protection was an abuse of process.
107. In view of our decision on the CPR discretion point it is unnecessary for the court to express a concluded view on abuse of process.

Recoverable loss

108. The same comment applies to the judge's conclusions on recoverable loss. He held that Tombstone also failed because on no basis could Tombstone be entitled to the relief by way of damages. No arguable case was made out in the pleadings for more than nominal damages for trespass and conversion (paragraph 83). Tombstone did not have possession of the properties sold by order of the court and there was no case of damage to the reversions. So there was no recoverable damage which would justify the court proceeding with the matter to an assessment. As Lightman J held that the respondents had a complete defence to the claims for trespass or conversion, it is unnecessary for the court to comment on Tombstone's criticisms of his judgment on the issues relating to pleading and proof of recoverable damage to Tombstone's assets.

Respondents' non-disclosure and breaches of duty

109. In the respondents' notice there is a challenge to Lightman J's conclusions on the circumstances in which the application was made for the 13 December order and the finding that there had been breaches of duty on the part of the respondents. Mr Onslow accepts that (a) there is a high duty on parties and their advocates in making a without notice application to the court and (b) errors of procedure were made on 13 December 2002. He submitted, however, that Lightman J was wrong in holding that there had been material non-disclosure or misrepresentation by the Estate to Peter Smith J and that Healys and counsel had been in breach of their duties to the court.
110. The court's attention has been drawn to "the reality of the situation" which, it is argued, was not taken into account by Lightman J. There was no failure of full and frank disclosure and Peter Smith J was not misled in circumstances in which he had or could properly be taken to have full knowledge of all the material facts. It is true that Peter Smith J had dealt with the case since 10 September 2002. He had gone into the detail of it and given judgments, including a judgment on 12 December on the issue of a writ of sequestration. He knew that Tombstone was not a party to the proceedings and it was proper to assume that he knew what he intended when he gave permission to issue a writ of sequestration. The application of 13 December was for clarification of what he had intended to be included in the writ in the light of his judgment on the previous day. The sequestrators wanted to know what was to be expressly included in the writ following his judgment on the relationship between Mr van Hoogstraten and Tombstone. He found as a fact that Tombstone belonged beneficially to Mr van Hoogstraten and that its assets should be treated as his assets. The situation on 13 December was not the same as an ex parte application for an interim injunction or a freezing order or a search and seize order. Peter Smith J was shown the draft amended writ, read it and made the order. It was reasonable for the respondents and their advisers to believe that he must have had all the material points in mind when he made the order. He had not suggested at any later stage in the proceedings that there had been any misrepresentation or non-disclosure to him on 13 December or any breach of duty.
111. In our judgment the respondents and their advisers are not relieved from their obligation to observe their high duties to the court by a belief that the judge "must have had knowledge of all the material facts" of a case because of his judicial involvement in the earlier stages of the litigation. Although counsel may often use, as a matter of courtesy, expressions like "As your Lordship knows" or "As you will recall", it must not be assumed by parties and their advisers that judges know all about the case before them without being told what they need to know on each occasion. Judges are immersed on a daily basis, both in and out of court, in the detailed facts of many cases and those facts will not be at the forefront of their minds when they are busy attending to other cases, as Peter Smith J was when he was Applications Judge on 13 December. In the case of all without notice applications it is essential that full disclosure should be made to the judge and that in all but the most urgent cases the relevant documents are submitted to him in advance of the hearing.
112. Lightman J was fully entitled to reach the conclusions that he did about the circumstances in which the application was made for the December 13 order.

D. COSTS APPEAL

Judgment on costs

113. In a separate judgment the judge dealt with the dispute about who should pay the costs of the trial of the Section G claims. As the judge dismissed Tombstone's claim, the respondents asked for an order for Tombstone to pay all the costs. They also sought an order for their assessment on an indemnity basis. Tombstone submitted that there should be no order as to costs, as the respondents had raised various issues in the action on which they had been unsuccessful, such as the question whether there had been a material breach of duty in obtaining the 13 December order. The judge's order that Tombstone should pay 60% of the costs did not satisfy either side. Hence an appeal and a cross appeal by Healy's on the ground that the judge ought not to have found such a material breach of duty.
114. The judge referred to the relevant legal principles in CPR Part 44. In the exercise of his discretion he took account of the issues on which the parties succeeded. Tombstone had succeeded in its contentions that the respondents could be held legally responsible for the acts of the sequestrators, that the 13 December order had been obtained irregularly by the respondents and that Tombstone was not affected by the fact that that order was set aside by the Court of Appeal on different grounds. The respondents succeeded on the points that the 13 December order was not a nullity, that it was liable to be set aside under the CPR rather than as of right under the inherent jurisdiction, that the discretion under the CPR should be exercised so as not to deprive the respondents of the protection of the court order for what had been done pursuant to the order and that no recoverable loss had been pleaded by Tombstone.
115. The judge took the conduct of the parties into account, in particular the "reprehensible and indeed disgraceful behaviour" of the respondents in irregularly obtaining the order of 13 December and the "extraordinary delay" of Tombstone in taking steps to apply to set aside the order.

Tombstone's submissions on costs

116. Tombstone submits that there should be no order for costs of the trial of the Section G claims principally on the ground that Tombstone had succeeded on most of the issues in the Section G claim which had incurred the majority of the costs. The respondents had, for example, unsuccessfully and unreasonably contested the question whether they were guilty of misrepresentation and non-disclosure and in breach of their duties in the application for the 13 December order. Although their conduct was strongly criticised by the judge, this was not adequately reflected in the costs order. Their conduct on the application on 13 December, which they unsuccessfully sought to justify, was far more serious than, and was different in kind from, Tombstone's conduct in subsequent delay in an application to the court
117. In holding that the respondents had succeeded on three of the five essential issues, as against the two issues on which Tombstone had succeeded, the judge had failed to consider the proportion of time and costs given or caused by each of those issues or the extent to which they overlapped.

Respondents' submissions on costs

118. The respondents submit that Lightman J had not exercised his discretion correctly. The respondents had successfully defended Tombstone's claims and should have been awarded all their costs of the action. They repeated their submissions that Lightman J was wrong to hold that there had been misrepresentation and non-disclosure on their part and breaches of duties to the court by their advisers and the judge ought not to have reduced the recoverable costs by taking those matters into account. The respondent accepted that, if there was a material breach of duty, the judge had exercised his discretion correctly.

Costs: discussion and conclusions

119. This court will not interfere with the wide discretion of the judge on costs, unless there was some error of principle or if for some other reason his decision was plainly wrong. In our judgment, this case comes nowhere near to justify upsetting the judge's exercise of discretion on costs. He directed himself in accordance with the correct legal principles and took proper account of the fact that the respondents had won the action, but had, on the way to success, lost a number of issues and had, in obtaining the 13 December Order, acted in a way which he was fully entitled to criticise. Tombstone's conduct was also relevant to the reason why it lost the case and thus relevant to the discretion on costs.
120. There are no grounds for interfering with the judge's costs order and we dismiss the appeal and the cross appeal against it.

E. RESULT

121. For the above reasons we dismiss the appeal against both the order on liability and the costs order. The judge correctly applied the relevant provisions of law and practice to his clear and unchallenged findings of fact. There are no grounds for interfering with his exercise of discretion under the CPR either in relation to the irregularly obtained order of 13 December 2002 or in respect of costs.

F. SKELETON ARGUMENTS

122. We end this judgment with a criticism of the excessive length and complexity of Tombstone's skeleton argument. It has 110 pages of text plus 64 pages of Appendices. Although its authors set out to assist the court, as well as the client, by a very thorough presentation of Tombstone's case, it is sensible to set reasonable limits to its length.
123. Mr Onslow described it "as an extremely long document" for a case that, while unusual, was not unduly complex. The appeal was from a judgment of modest length (27 pages). It was very hard, he said, to see what justified such voluminous arguments. Most of the legal issues have been settled by existing authority. No primary findings of fact are challenged on the appeal. He added that, from Healys' perspective, this had added to the length of their skeleton argument (56 pages), which they had tried to keep as short as possible. It had also added considerably to the cost and length of the appeal.
124. The length of Tombstone's skeleton did not assist the court. In fact, it tended to detract from Tombstone's case, which was accurately and far more succinctly stated by Mr Onslow in his written and oral responses to it. His team adopted the technique of briefly stating the points taken by Tombstone and then concisely commenting on them.
125. Practitioners who ignore practice directions on skeleton arguments (see CPR 52PD paras 5.10 "Each point should be stated as concisely as the nature of the case allows") and do so without the imposition of any formal penalty are well advised to note the risk of the court's negative reaction to unnecessarily long written submissions. The skeleton argument procedure was introduced to assist the court, as well as the parties, by improving preparations for, and the efficiency of, adversarial oral hearings, which remain central to this court's public role.
126. We remind practitioners that skeleton arguments should not be prepared as verbatim scripts to be read out in public or as footnoted theses to be read in private. Good skeleton arguments are tools with practical uses: an agenda for the hearing, a summary of the main points, propositions and arguments to be developed orally, a useful way of noting citations and references, a convenient place for making cross references, a time-saving means of avoiding unnecessary dictation to the court and laborious and pointless note-taking by the court.
127. Skeleton arguments are aids to oral advocacy. They are not written briefs which are used in some jurisdictions as substitutes for oral advocacy. An unintended and unfortunate side effect of the growth in written advocacy (written opening and closing submissions and "speaking notes", as well as skeleton arguments) has been that too many practitioners, at increased cost to their clients and diminishing assistance to the court, burden their opponents and the court with written briefs. They are anything but brief. The result is that there is no real saving of legal costs, or of precious hearing, reading and writing time. As has happened in this case, the opponent's skeleton argument becomes longer and the judgment reflecting the lengthy written submissions tends to be longer than is really necessary to explain to the parties why they have won or lost an appeal.
128. The skeletal nature of written advocacy is in danger of being overlooked. In some cases we are weighed down by the skeleton arguments and when we dare to complain about the time they take up, we are sometimes told that we can read them "in our own time" after the hearing. In our judgment, this is not what appellate advocacy is about, or ought to be about, in this court.