| INJUNCTION — Freezing order — Jurisdiction — Without notice application — Case for substantive relief not formulated — Whether order properly made — Freezing order set aside — Whether proper to order costs in favour of respondent on indemnity basis
Fourie v Le Roux and others [2007] UKHL 1
HL(E): Lord Bingham of Cornhill, Lord Hope of Craighead, Lord Scott of Foscote, Lord Rodger of Earlsferry and Lord Carswell: 24 January 2007
The grant of a freezing order, on a without notice application, would be unlikely to be properly made in the absence of any formulation of the case for substantive relief that the applicant intended to institute. Where an order was set aside for that reason, an award of costs on an indemnity basis in favour of the respondent was difficult to justify, but the Court of Appeal’s affirmation of such an award in the instant case would not be interfered with.
The House of Lords (Lord Hope of Craighead dissenting in respect of indemnity costs) so held in dismissing an appeal by the applicant liquidator, John Louis Carter Fourie, from the decision of the Court of Appeal (Sir Andrew Morritt V-C, Mance and Jonathan Parker LJJ) [2005] EWCA Civ 204; [2005] BPIR 756 dismissing his appeal from John Jarvis QC, sitting as a deputy judge of the Chancery Division [2004] EWHC 2260 (Ch). The deputy judge had discharged a freezing order made by Park J on 9 July 2004.
LORD SCOTT OF FOSCOTE said that the freezing order, commonly called a Mareva injunction, had been made by Park J on a without notice application made by the applicant in his capacity as liquidator of two South African companies. The deputy judge had subsequently discharged the order, observing that no proceedings for substantive relief had been commenced or formulated when the matter had been before Park J. He had ordered the applicant to pay costs on an indemnity basis. His Lordship found it very difficult to visualise a case where the grant of a freezing order, without notice, would be properly made in the absence of any formulation of the case for substantive relief that the applicant intended to institute. The respondents’ challenge to the propriety of the making of the order had been entitled to succeed. As to indemnity costs, it was difficult to identify why the procedural deficiencies of the application should have warranted such an order, but the recent procedural reforms seemed to contemplate greater use of the discretion to award costs on that basis and their Lordships should not interfere with the Court of Appeal’s affirmation of the deputy judge’s award.
LORD BINGHAM, LORD RODGER and LORD CARSWELL delivered opinions agreeing with Lord Scott.
LORD HOPE OF CRAIGHEAD, agreeing with Lord Scott on the main issue, said that he would have substituted an order for costs on the standard basis for the order for indemnity costs.
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