The Arab Monetary Fund v Hashim & Ors

Factual and Procedural Background

The Arab Monetary Fund ("AMF") initiated proceedings against Dr Hashim, his wife ("Mrs Hashim"), and their two sons ("Jafar" and "Omar") following allegations that Dr Hashim, formerly Director General of the AMF, misappropriated approximately US $50 million belonging to the AMF. Part of this sum was lost through illicit trading, part embezzled, and part dissipated in breach of trust through family members. The AMF commenced legal action in December 1988, obtaining a worldwide Mareva injunction against Dr and Mrs Hashim on the same day. Additional defendants, including the two sons, were later joined.

The trial, conducted by Chadwick J from January 1993, resulted in findings that Dr Hashim had fraudulently misappropriated funds, forged documents, and provided dishonest evidence. The judge appointed interim receivers over English properties and declared that properties held by Jafar and Omar in Canada were held on constructive trust for the AMF. Mrs Hashim was found to have knowingly breached the Mareva injunction by dissipating funds. Orders for costs were made against the defendants accordingly. Appeals were filed by Dr and Mrs Hashim, and by Jafar and Omar, with most adverse factual findings remaining unchallenged.

Subsequent applications by the AMF alleged contempt of court by Dr and Mrs Hashim for breaches of the injunction and non-compliance with court orders. Dr Hashim was sentenced to imprisonment for contempt, while Mrs Hashim was found to be a contemnor but was not imprisoned. The family members later filed for voluntary bankruptcy in Arizona, resulting in automatic stays of proceedings and complicating enforcement efforts.

Parallel proceedings in Ontario upheld the constructive trust over three Canadian properties held by Jafar and Omar, with receivers appointed and sales effected or in progress. The AMF brought multiple applications in the Court of Appeal, including to debar Dr and Mrs Hashim from appealing due to contempt, to strike out appeals by Jafar and Omar concerning the Canadian properties, to secure costs from the appellants, and to stay taxation of costs pending appeal outcomes.

Legal Issues Presented

1. Whether Dr and Mrs Hashim should be debarred from appealing due to unpurged contempt of court.
2. Whether the Court of Appeal should strike out the Notices of Appeal filed by Jafar and Omar in respect of the Canadian properties as frivolous, vexatious, or an abuse of process.
3. Whether security for costs should be ordered against Mrs Hashim, Jafar, and Omar, taking into account their legal aid status and means.
4. Whether the taxation of costs in the proceedings should be stayed pending the outcome of the appeals.

Arguments of the Parties

Applicant's Arguments (Arab Monetary Fund)

• Dr and Mrs Hashim should be debarred from appealing because they remain in contempt, having neither apologized nor purged their breaches of court orders.
• The appeals by Jafar and Omar concerning the Canadian properties are academic and should be struck out, as Canadian enforcement actions have rendered any appellate relief ineffective.
• Security for costs should be ordered against Mrs Hashim, Jafar, and Omar due to their residence abroad, the risk of non-payment, and the lack of enforceability of costs orders in Arizona.
• Taxation of costs should be stayed pending appeal outcomes to avoid unnecessary and potentially futile proceedings.

Respondents' Arguments

• Dr Hashim and Jafar, although not represented at the hearing, submitted written opposition to some applications.
• Mrs Hashim and Omar, represented by counsel and legally aided, resisted applications for security for costs on the basis that they lack means to provide security and that it would be unjust to deny them the right to appeal.
• Omar and Jafar disputed the characterization of their appeals as frivolous and argued against striking out.
• Opposition to the stay of taxation of costs was raised on grounds of delay and alleged intimidation by the AMF, with suggestions that any further time applications should be made to the Taxing Master.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
X Ltd v Morgan-Grampian (Publishers) Ltd [1991] AC 1	General principle that a court will not hear a party in contempt unless the contempt is purged, with exceptions for appeals against the order disobeyed.	The court applied this principle to assess whether contemnors should be heard on appeal, emphasizing discretion and the interests of justice.
The Messiniaki Tolmi [1981] 2 Lloyd's Rep 595	Exception to the general rule against hearing contemnors when appealing the very order breached.	Used to support the flexible exercise of discretion in hearing appeals by contemnors.
Hadkinson v Hadkinson [1952] P 285	Discretionary refusal to hear contemnors only when contempt impedes justice and no other remedy exists.	Guided the court’s flexible approach to contemnor appeals, balancing justice and enforcement of orders.
Kloeckner & Co AG v Gatoil Overseas Inc (unreported, 16.3.90)	The burden on an appellant to show inability to provide security for costs, including inability to raise funds from any source.	Supported the court’s requirement that appellants demonstrate lack of means to avoid unjust denial of appeal rights.
Wyld v Silver [1962] 1 WLR 863	Legally aided appellants should not be ordered to provide security for costs if it would effectively bar a reasonably arguable appeal.	Informed the court’s consideration of legal aid status in ordering security for costs.
Ballantyne v Douglas 1953 SLT 310	The court determines what sum is reasonable for a legally aided party to pay, independent of the Legal Aid Board’s determination.	Supported the court’s authority to order security for costs against legally aided appellants if reasonable.

Court's Reasoning and Analysis

The court first addressed whether Dr and Mrs Hashim should be heard on appeal given their contempt. Citing leading authorities, it emphasized a discretionary, flexible approach rather than a rigid bar on hearing contemnors. The court found Dr Hashim’s contempts to be serious, deliberate, ongoing, and designed to frustrate enforcement of the judgment. As he had not purged his contempt nor shown intention to comply, the court held it would be contrary to justice and law to permit him to appeal, and accordingly struck out his appeal.

In contrast, Mrs Hashim’s contempt related to a single breach by transferring funds in violation of the injunction. She had not apologized or repaid the sum, but the court noted she might have arguable grounds on liability and costs proportionality. Considering the interests of justice, the court declined to debar her from appealing.

Regarding Jafar and Omar’s appeals against the constructive trust findings on Canadian properties, the court recognized that enforcement actions in Canada had materially progressed, limiting practical relief even if errors were shown. However, the court was reluctant to conclude that the appeals were frivolous or vexatious, emphasizing the importance of the court process not becoming an instrument of injustice. It declined to strike out these appeals.

On security for costs, the court acknowledged the general practice against ordering security from legally aided appellants but held that special circumstances existed: the appellants resided abroad, enforcement in Arizona was uncertain, and there was risk of non-payment. The court carefully balanced the onus on respondents to show special circumstances and on appellants to demonstrate inability to pay or raise security. After detailed examination of evidence, the court concluded Mrs Hashim, Jafar, and Omar could provide security if they genuinely wished to pursue their appeals. Accordingly, it ordered security for costs to be provided within a specified timeframe, with dismissal of appeals if security was not furnished.

Finally, the court considered the AMF’s application to stay taxation of costs pending appeals. It found it appropriate to avoid the burden and expense of taxation before appeal outcomes were known, especially as costs orders might be varied. The court ordered a stay of taxation with a set-off mechanism between costs payable to and by the AMF, while acknowledging the need to avoid indefinite delay.

Holding and Implications

The court held:

• Dr Hashim’s appeal is struck out due to unpurged and ongoing contempt of court.
• The application to debar Mrs Hashim from appealing is refused; she may proceed with her appeal.
• The applications to strike out the Notices of Appeal by Jafar and Omar concerning the Canadian properties are refused; their appeals may proceed.
• Mrs Hashim, Jafar, and Omar are ordered to provide security for costs within 56 days of the Registrar’s determination of the quantum; failure to do so results in dismissal of their appeals.
• The AMF’s application to stay taxation of costs pending appeal outcomes is granted, with a set-off of costs payable to and by the AMF.

Implications: The decision enforces the principle that contemnors who wilfully disobey court orders and fail to purge contempt may be denied access to appeal rights, reinforcing respect for court authority. The court also balances access to justice for legally aided appellants with the protection of respondents from unrecoverable costs, particularly where appellants reside abroad and enforcement is uncertain. The refusal to strike out the appeals of Jafar and Omar preserves their right to challenge adverse findings despite enforcement developments abroad, reflecting the court’s caution against prematurely foreclosing substantive appeals. The stay of taxation pending appeals conserves judicial resources and prevents premature costs disputes. No new precedent was established beyond the application of existing principles to the complex facts.