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High Court confirms that a search order can be granted post-judgment against a third party

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Other

30-11-2017

Albert John Martin Abela & Ors v Ahmad Baadarani [2017] EWHC 269 (Ch)

Facts of the case

  • Section 7 of the Civil Procedure Act 1997 (“CPA 1997”) put on a statutory footing what had been the practice of the court in relation to Anton Pillar (search) orders. It states:
    • “(1) The court may make an order under this section for the purposes of securing, in the case of any existing or proposed proceedings in the court:
    • (a) the preservation of evidence which is or may be relevant; or
    • (b) the preservation of property which is or may be the subject matter of the proceedings or as to which any question arises or may arise in the proceedings”.
  • The Claimants (“Cs”) made several attempts to obtain information about the assets of the Defendant (“D”) following default judgment and various cost orders in their favour. These included obtaining a third party disclosure order against the Respondents (“Rs”).
  • Cs had doubts about the extent to which the Rs had complied with the disclosure order and successfully applied without notice for a search order. This was wider in scope than the original disclosure order.
  • On the return date, the Rs sought to have the search order set aside on the following grounds:
    • the reference in section 7(1) of the CPA 1997 to “existing or proposed proceedings” meant that the court did not have jurisdiction to grant a search order post-judgment; and
    • section 7(1) did not permit a search order to be granted against a third party, except “tethered to some substantive rights against the party”. Accordingly, where this substantive right was a disclosure order, the search order would need to track its scope.

The decision

Nugee J dismissed the application, finding that:

  • for the purposes of section 7(1) of the CPA 1997, “proceedings” includes post-judgment steps taken against a judgment debtor since “proceedings” do not necessarily come to an end with judgment;
  • a search order may be granted against persons who are not defendants and against whom no cause of action lies; and
  • section 7(1) gives the requisite jurisdiction to grant a search order whether or not a third party disclosure order has already been made or, if it has, whether its terms are more limited than the search order sought.

Analysis and practical advice

  • Once a party has obtained judgment, it will often have to take further steps against a judgment debtor in order to enforce it. This case is therefore welcome confirmation that not only are search orders available to assist with the obtaining of evidence for that purpose, but are a free-standing interim remedy available against both judgment debtors and third parties alike. While the judgment debtor will often be the main source of documentary evidence, third parties may also be in possession of relevant material and the jurisdiction to grant search orders against them is consistent with the jurisdiction to seek evidence from them by witness summons, Norwich Pharmacal order or non-party disclosure.
  • However, given its intrusive nature, a search order will never be granted as a matter of routine. An applicant will need to satisfy the court, inter alia, that the evidence sought is or may be relevant to the proceedings, and that there is a real risk of its destruction or concealment.

 

 

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