Practice

Freezing order - claimant giving cross-undertaking in damages in support of application - continuing obligation on claimant to disclose any material change for worse in financial position

Staines v Walsh: ChD (Mr Justice Laddie): 10 June 2003

The claimant obtained a freezing order in his favour against the defendant in the sum of 180,000.

The claimant gave the usual cross-undertaking in damages, in support of which he disclosed that his main asset was the equity, in the sum of 400,000, in a flat which he owned.

Although the defendant disputed the debt, he paid the amount frozen into court in order to extinguish the freezing order.

The claimant applied to increase the level of the order to 370,000.

The defendant challenged the claimant's ability adequately to cover the cross-undertaking, alleging, among other things, that the claimant had neglected to disclose to the court that his property had been remortgaged to the point that there was very little, if any, equity left.

Simon Edwards (instructed by Sprecher Grier Halberstam LLB) for the claimant; Marion Smith (instructed by Richards Butler) for the defendant.

Held, refusing the application, that so long as a freezing order was in force there was a continuing obligation on the claimant to be willing and able to honour the cross-undertaking as well as to disclose to the defendant any material change for the worse in his financial position; that the defendant could then, either seek the voluntary removal of or reduction in the amount of the order, or apply to the court for the same; that, since the claimant had hidden his severely changed financial position, the freezing order would not be extended; and that, had there been an application to discharge the order, the court would have given it serious consideration.

District judge's decision on costs - rehearing before judge in county court - requirement to make clear whether rehearing at first instance or first-tier appeal

Fowler de Pledge (a firm) v Smith: CA (Lords Justice Schiemann, Brooke and Jonathan Parker): 20 May 2003

A district judge determined, pursuant to section 17 of the Legal Aid Act 1988, that the legally aided defendant should pay all the claimant's costs.

A judge ordered the matter to be reheard on appeal, but the judge conducting the rehearing observed that he was hearing the matter de novo.

He criticised the defendant's conduct, upheld the district judge's determination and made an order which simply directed that the defendant should pay the amount of the original costs certificate with interest.

The defendant lodged a notice of appeal in the Court of Appeal, but the office staff took the view that it was a first-tier appeal which properly lay to the High Court.

The defendant thereupon appealed to the High Court.

The claimants sought an order that it was a second-tier appeal which lay to the Court of Appeal and required permission.

Mr Justice Garland rejected the claimant's arguments on jurisdiction, concluding that the rehearing before the judge in the county court was a first-instance hearing at appeal court level as opposed to a first-tier appeal against the district judge's decision.

He dismissed the defendant's appeal on the merits.

The defendant appealed.

Tim Nesbitt (instructed by Fosters, Norwich) for the defendant; Richard Roberts (instructed by Fowler de Pledge, Cambridge) for the claimant.

Held, allowing the appeal, that the order of the judge in the county court showed that he had heard a first-tier appeal, with the result that the appeal from that decision was a second-tier appeal which lay to the Court of Appeal and required permission; that appellate courts should make it clear on the face of their orders whether they had heard an appeal, in which case any subsequent appeal would be a second-tier appeal, or conducted a rehearing at first instance; and that the judge in the county court had been overly influenced by his adverse view of the defendant's conduct and had paid insufficient attention to his means.