KAZAN PROPERTIES AND INVESTMENTS LTD v. KING'S DYEING AND WEAVING FACTORY LTD (IN LIQUIDATION)

______________

J U D G M E N T

______________

Cons, Ag. C.J.:

1. The various approaches which we discussed earlier this morning eventually resolved themselves into this application, which is for the stay of an order which will flow automatically from our earlier judgment, namely that the liquidator should repay the sum of $760,361.66 to the Kazan Properties & Investments Ltd. That raises a question which is not easy to resolve. There appear to he no direct authorities to help us, at least none has been quoted.

2. The resolution involves the conflict of two ideas. The first arises because the money which is now in the hands of the liquidator is there only because of the decision of Jones, J. which this Court has found to be mistaken. Likewise, had it not been for that decision the liquidator could have no shadow of a claim for the particular sum. It may even be, although we do not have the details, that but for the decision the money might never have come into the possession of Kazan at all.

3. Mr. Swaine, who appears for Kazan, has drawn our attention to the old case of Rodger v. Comptoir D'Escompte de Paris^(l) which shows that court should endeavour to ensure that no suitor is ever prejudiced by the mistake of the court with the very greatest respect, that would seem to be a principle that hardly needs support from authority. If we adopt this line of approach, then we should not in any way hinder the return of the money to Kazan.

4. On the other hand it is now well established that where a plaintiff has a claim against another party, and he can show the court that the other party is likely, before the claim can be made good, to dispose of assets which could be available to meet the claim, then unless good reason is shown, the court will normally make an order freezing those assets. It willdo so even more willingly when the plaintiff already has a judgment in his favour. The plaintiff in this case has a judgment in his favour, a judgment for costs. Although it has not yet been quantified, speaking for myself, I have little doubt that when it is quantified, it will be at least equal to the sum with which at the moment we are concerned.

5. The difficult question then comes as to whether the first approach that I mentioned, the preventing of injustice to wronged suitors, would he sufficiently good reason for refusing to freeze Kazan's assets now in the hands of the liquidators, and which in my view are very likely to be swiftly disposed of if returned into their own.

6. For myself, having given as much consideration as I can to this matter, I have come to the conclusion that it is not necessary to decide that question as such, because of one matter that is peculiar to this particular instance. Looking at the matter broadly, it seems to me that what we are really discussing is a question of security for the costs. But that is a matter which has already been dealt with by a consent order, in which both parties agreed that the security for the costs of this apeal should be in a specific amount. The liquidator, of course, was party to that consent. In my opinion therefore we should not do anything which would now give the liquidator the benefit of security in excess of the amount agreed, and for that reason, I, for my part, would refuse the applicaton for a stay.

Clough, J.A.:

7. I agree.

Power, J. A. :

8. I concur with what has fallen from the Acting Chief Justice. I wish to add, for my part, that I do not consider that the rights of the liquidator with regard to the money when it is, as it shortly will be, in the hands of Kazan, are in any way prejudiced by our ruling today.

(1) (1871) L.R. 3 P.C. 465