Summary

The Court of Appeal has provided authoritative guidance on the abuse of process known as “warehousing” in its first judgment on the subject for almost 20 years. David Mumford QC and James Kinman appeared for the successful respondent.

Facts

The case concerns a dispute over a high value London property, formerly held by a Liechtenstein foundation for the benefit of members of the Saudi royal family. The property was transferred to the defendant in October 2011. The foundation claims that the transfer was effected by a rogue officer, acting without authority, and issued proceedings to recover the property in April 2015.

The foundation did not take any steps to progress the proceedings between November 2016 and August 2017, in circumstances in which there was no rule or court order requiring it to do so, and the defendant had issued proceedings in Liechtenstein challenging the authority of the foundation’s board to pursue proceedings in England.

At first instance, Deputy Master Cousins found that the foundation’s decision to unilaterally pause proceedings without the consent of the defendant or the court constituted abusive “warehousing”, and struck out the foundation’s claim. This decision was reversed on appeal to HHJ Cooke in the High Court ([2019] EWHC 274 (Ch)). The defendant appealed to the Court of Appeal, seeking to reinstate the strike-out.

The Court of Appeal found that the Deputy Master was wrong to regard any unilateral decision by a claimant to place proceedings on hold as necessarily abusive. Whether or not such a decision is abusive turns upon the reason for the decision being taken and the strength of that reason, objectively considered, having regard to the length of the period in question. On the facts of the case, the foundation’s decision was not abusive.

The Court of Appeal also upheld HHJ Cooke’s decision that, even if the foundation had committed an abuse of process, the Deputy Master’s decision to strike out the claim was disproportionate and had been improperly influenced by irrelevant considerations, such as the foundation’s refusal to provide details of its assets to the defendant.

David Mumford QC and James Kinman were instructed by Bryan Cave Leighton Paisner LLP (partner: Graham Shear).

Held.