Asturion Foundation v Aljawharah Bint Ibrahim Abdulaziz Alibrahim (2019)
The appellant's decision to suspend the progress of its claim against the respondent while related litigation was taking place in Liechtenstein should not have led to the striking out of the claim.
The appellant appealed against a deputy master's decision striking out its claim against the respondent.
The appellant was a Liechtenstein entity, controlled by a board, which had been set up to hold and manage certain assets for the benefit of certain members of the Saudi royal family. The respondent was one of the widows of the late King Fahd. In 2011, a member of the appellant's board (X) executed transfers of four high-value properties to the respondent for no consideration. X claimed to have acted on the basis of the late king's instructions. The instant action concerned one of the properties. The appellant alleged that X did not have the power or authority to act for it in making the transfer and that the transfer was therefore void or voidable. Proceedings were issued in April 2015. The respondent's defence was filed on 18 September 2015, after a number of agreed extensions of time. The appellant filed a reply on 18 December 2015. The parties agreed directions; however, for reasons unknown, the court did not make those directions. Between March and November 2016, the parties' solicitors corresponded regarding the amendment of the pleadings. Thereafter, there was no progression of the claim until August 2017. In a letter dated 23 August 2017, the appellant's solicitors stated that they intended to ask the court to approve directions or fix a case-management conference. They explained the recent lack of activity by stating that as "the parties have been involved in separate court proceedings in Liechtenstein", they had considered that "there was no immediate need to push ahead with directions to trial". The Liechtenstein proceedings were an application by the respondent, made in December 2015, to remove the three members of the appellant's board on the basis, among other things, that they were acting improperly by pursuing against her the instant action and similar claims in France and Spain. The respondent's solicitors believed that the appellant's solicitors' letter contained an admission of "warehousing" (issuing and maintaining proceedings with no real intention of carrying them through to trial) and issued an application to strike out the claim on that basis. The deputy master acceded to the application, finding that the use of the words "there was no immediate need to push ahead with directions to trial" amounted to warehousing and that such conduct was an abuse of process. The deputy master also found that there had been a "long period of inactivity" on the appellant's part.
Proper approach to warehousing and delay - The authorities did not establish any principle that delay that might be described as warehousing would always and necessarily be an abuse of process. It was now established that delay might amount to an abuse of process in circumstances short of a finding that the claimant had permanently abandoned any intention to pursue proceedings, but that the court would examine all the circumstances in which the delay occurred, including the length of the delay, the degree of the claimant's responsibility for it and the reasons given for it, and assess whether they amounted to an abuse of process, as distinct from "mere" delay. "Warehousing" might be descriptive of some circumstances that showed abuse, primarily where for an extended period the claimant had no present intention of pursuing the claim but kept it going in case it decided to do so in the future, but application of that term was not determinative. The cases did not establish the proposition that any decision to pause proceedings dependent on a contingency, or dependent on the outcome of other litigation, would amount to an abuse of process as a matter of law. Among other things, that proposition took no account of the nature of the contingency or other litigation, and how related or otherwise it was to the claim or issues in it. It also took no account of the length of the delay (see paras 25, 41, 43 of judgment).
The instant case - The Liechtenstein proceedings were directly relevant to carrying on the instant claim. The Liechtenstein claim sought to undermine entirely the legitimacy of pursuing the instant claim. Accordingly, there was understandable reason to await the outcome of the Liechtenstein proceedings. Further, the deputy master had overstated the position by saying that by August 2017 there had been a "long period of inactivity" by the appellant. The parties were not in breach of any directions, and good parts of the time taken could equally be attributed to the respondent in that she took extended periods to formulate her defence and then put forward amendments. The real period of inactivity was between November 2016 and August 2017. That should not be condoned; the proper course would have been to seek to agree a pause with the respondent pending the outcome in Liechtenstein or an order from the court. But it was not a particularly long period and there was good reason to believe that the respondent was content not to press on, the avowed object of her Liechtenstein claim being to stop the instant proceedings. In the circumstances, the deputy master had erred in law in striking out the claim as an abuse of process (paras 45, 52, 56-57, 62).