Lakatamia Shipping Company Ltd & Ors v Su & Ors

Factual and Procedural Background

On 5 November 2014, Company A obtained a judgment in the Commercial Court against the Appellant for a sum exceeding $60 million. Since the judgment, very little of the debt has been recovered. Company A has pursued the Appellant to recover the debt and made several applications to disclose assets available to satisfy the judgment. Prior to trial, a worldwide freezing order was made against the Appellant, and on 26 January 2018, a passport order was granted requiring the Appellant to surrender all passports and travel documents enabling him to leave the jurisdiction, restraining him from leaving England and Wales until after attending a Means Hearing under CPR 71 to give information about his financial means.

The passport order jurisdiction is a relatively recent development under s. 37(1) of the Senior Courts Act 1981, designed to prevent defendants from frustrating disclosure orders by leaving the jurisdiction. The order must be limited in duration and cannot be used as a means of enforcing judgments by restricting liberty indefinitely. Most passport orders are granted to facilitate disclosure, and the court must balance the impact on a foreign defendant's liberty and family life with the necessity of the order.

In the present case, over three years after the initial passport order, the Appellant remains subject to the injunction. He has been found in contempt for breaching interlocutory orders and is currently imprisoned. The Means Hearing has been extended due to incomplete disclosure by the Appellant. The passport order, as continued and varied, is set to expire on 31 July unless extended. The Appellant appeals against a refusal to discharge a continuation of the passport order made on 30 January 2020, primarily arguing that the order forces him to commit a criminal offence by overstaying his visa and infringes his Article 8 rights under the European Convention on Human Rights.

The procedural history includes the Appellant being served with the passport order in January 2019, subsequent breaches of freezing and passport orders, multiple committal orders for contempt, adjournments of the Means Hearing, a search order executed on the Appellant’s residence, and the Appellant’s bankruptcy application which was later annulled. The second Means Hearing was delayed partly due to the Appellant's non-compliance and obstructive conduct. The continuation of the passport order was challenged but upheld by the court, which found the Appellant to be a flight risk and justified the restraint until the Means Hearing could be effectively conducted.

Legal Issues Presented

1. Whether the continuation of the passport order infringed the Appellant's rights under Article 8 of the European Convention on Human Rights.
2. Whether the continuation of the passport order unlawfully compelled the Appellant to commit a criminal offence by remaining in the jurisdiction without valid leave (overstaying his visa).
3. Whether the passage of time since the original passport order constituted a material change of circumstances justifying discharge or variation of the order.
4. Whether the judge failed to apply general equitable principles in considering the discharge of the passport order.

Arguments of the Parties

Appellant's Arguments

• The continuation of the passport order infringed his Article 8 rights by interfering with his family and private life, including inability to see his elderly mother and children, and restrictions on his liberty.
• The passport order forced him to commit a criminal offence under s. 24 of the Immigration Act 1971 by causing him to remain in the UK without valid leave.
• The judge erred by treating the passage of time since the original order as legally irrelevant and thus refusing to reconsider or discharge the order.
• The judge failed to apply general equitable principles in deciding whether to discharge the order.

Company A's Arguments

• The judge was correct to reject the immigration offence and Article 8 arguments for the reasons given, including the likelihood of discretionary leave to remain and the Appellant’s imprisonment limiting any criminal consequences.
• The delay in conducting the Means Hearing was entirely attributable to the Appellant’s repeated breaches of disclosure orders and obstructive conduct.
• Although the duration of the passport order is exceptional, it is justified due to the Appellant’s deliberate non-compliance and the need to protect the court’s process.
• The continuation of the passport order was necessary to ensure an effective Means Hearing and to prevent the Appellant from frustrating the disclosure process or absconding.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the extraordinary facts of the case, including the Appellant's prolonged imprisonment for contempt and repeated breaches of disclosure orders. It emphasized that passport orders are a novel and exceptional jurisdiction designed to facilitate disclosure and should be of limited duration, interfering with liberty only as necessary.

The court rejected the argument that the passport order unlawfully compelled the Appellant to commit a criminal offence by overstaying his visa, noting the Appellant's imprisonment and the Secretary of State’s discretionary power to grant leave to remain in exceptional circumstances.

Regarding the Article 8 challenge, the court held that the judge had conducted a proportionality review, considering the Appellant's evidence and the impact of the order on his family and private life. The court found the evidence insufficient to establish the existence of protected family life with the Appellant’s mother or children as required by established case law.

The court further found that the judge correctly attributed the delay in conducting the Means Hearing to the Appellant’s own misconduct and non-compliance. The judge did not treat the passage of time as irrelevant but concluded the delay was caused by the Appellant’s defaults, justifying continuation of the order.

The court emphasized that the discretion to grant and continue passport orders must consider all circumstances, including the conduct of the defendant. It rejected the notion that an order must be discharged solely due to the passage of time if the delay is attributable to the defendant’s own misconduct, as this would reward bad faith.

Ultimately, the court found no error of principle in the judge’s reasoning and upheld the continuation of the passport order until the second Means Hearing could be conducted effectively.

Holding and Implications

The appeal is dismissed.

The court upheld the continuation of the passport order restraining the Appellant from leaving the jurisdiction until after the second Means Hearing. The decision underscores that passport orders, while interfering with personal liberty, may be continued for extended periods when justified by the defendant's obstructive conduct and the necessity of ensuring effective disclosure. The judgment clarifies that the passage of time alone does not mandate discharge if the delay is caused by the defendant’s own actions. No new precedent was set beyond applying established principles to the exceptional facts of this case. The direct effect is that the Appellant remains subject to the passport order until the Means Hearing concludes, with the court emphasizing the need for this hearing to proceed swiftly.