Welcome to the twenty-sixth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2013.
These updates are aimed at keeping you up to speed and informed of the latest developments in caselaw relevant to your practice.
This week's caselaw
- Sukhoruchkin & Ors v Van Bestein & Ors
A case involving freezing injunctions and the test for dissipation/the effect of delay. - JSC BTA Bank v Ereshchenko
Judge considers the test for proving dishonesty on an application to commit for contempt. - Haxton v Philips Electronics
A decision on whether a widow could recover her full loss of dependency in proceedings brought in her own name - of possible interest to employers' liability insurers.
Sukhoruchkin & Ors v Van Bestein & Ors
Freezing injunctions and the test for dissipation/the effect of delay
http://www.bailii.org/ew/cases/EWHC/Ch/2013/1993.html
One of the issues in this case was whether a freezing injunction should be granted. The following was considered by Morgan J:
- Was there a risk of dissipation? The judge accepted that
specific allegations of dishonesty and wrongdoing could point
towards a risk of dissipation. However, he found that the claimant
did not have a good arguable case in relation to those allegations
and on that ground, no freezing injunction should be granted.
The judge found the way the defendants had conducted the litigation "less persuasive". They had consulted lawyers and made very detailed and well-formulated allegations of wrongdoing by the claimants. Although the strength of those allegations had not been evaluated, the judge held that this did not show any propensity on the part of the defendants to behave badly in defending the claim against them.
The defendants had also alleged that they were entitled to have an "exceptionally lavish and expensive lifestyle" and that they were entitled to make large unexplained gifts. Morgan J was not persuaded that that was right but did not feel he had to reach a final view on the point. It was also a "less powerful" argument that the defendants had created an "elaborate and sophisticated structure" using off-shore companies and nominee shareholdings. - What was the effect of a 5 month delay by the claimant before making the application? Had he been persuaded to grant the injunction, the judge said that he would not have been persuaded by an argument that the defendants had already had adequate opportunity to dissipate their assets. He said that "in this respect, the past is not a certain guide to the future". If the case against the defendants became stronger, the defendants might at that point feel that they had a greater incentive to dissipate assets.
JSC BTA Bank v Ereshchenko
Proving dishonesty on an application to commit for contempt
http://www.bailii.org/ew/cases/EWCA/Civ/2013/1961.html
The claimant applied to commit the respondent to prison for contempt of court, on the basis that he had responded dishonestly to a disclosure order made by the court. This disclosure order had required him to answer a set of questions after making all reasonable enquiries. Vos J held that it had not been proven that the respondent had deliberately lied and that the respondent had instead "behaved like an ostrich". The claimant appealed against that decision and the Court of Appeal has now dismissed that appeal.
Although it is legally possible to appeal against a judge's refusal to commit for contempt, such appeals rarely succeed. Although the Court of Appeal found that the judge's ostrich analogy "may or may not have been helpful", it could not be said that the judge had erred. The claimant had to prove that every aspect of the respondent's relevant statements had been untrue. Although the respondent had, objectively, failed to make all reasonable enquiries, that alone was not enough to prove dishonesty. It also had to be proven that the respondent subjectively knew, when he made the statements in question, that he had not made all reasonable enquiries open to him that might enable him to answer the questions in the disclosure order.
Haxton v Philips Electronics
Whether widow could recover full loss of dependency in proceedings brought in her own name - of possible interest to employers' liability insurers
Mrs Haxton contracted mesothelioma during the course of her husband's employment with the defendant because she used to wash his work clothes, which were covered with asbestos dust. She brought two claims against the defendant: (1) a claim as executrix of her late husband's estate; and (2) a claim in her own name for her own mesothelioma. In the first claim, she claimed her loss of future dependency under the Fatal Accidents Act 1976. However, it is well-established that the amount of such a claim will depend on the life expectancy of the dependant and in this case, that had been reduced due to the negligence of the defendant.
Mrs Haxton therefore sought to recover in the second claim the full loss of future dependency which she would have recovered, had she not developed mesothelioma. She argued that the compensatory nature of damages in personal injury claims should put her into the position which she would have been in had the wrong not occurred. That claim was rejected by the judge: "Mrs Haxton should not be entitled to claim in the second proceedings what she was not entitled to claim in the first proceedings as dependant".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
