A J Bekhor & Co Ltd v Bilton

The plaintiffs issued a writ against the defendant claiming the sum of Ј217,077, to which the defendant filed an arguable defence and counterclaim. The plaintiffs subsequently learnt that the defendant had sold a farm which had been his home in the United Kingdom and, fearing that he might remove himself and his assets out of the jurisdiction, they obtained a Mareva injunction restraining him from removing assets out of the jurisdiction except in so far as his assets within the jurisdiction exceeded Ј250,000. On an application by the defendant and subject to his undertaking not to change the investment of his assets within the jurisdiction so as to cause them to depreciate in value, the Mareva injunction was varied to allow him to take his car, certain personal possessions and Ј1,250 per month out of the jurisdiction. In an affidavit in support of his application the defendant deposed that his marriage had broken up and that he had taken a one-year lease of a flat in Monte Carlo at a rent of nearly Ј15,000 where he intended to live with another woman. The defendant later made a further application for a variation of the injunction to permit him to meet financial obligations within the jurisdiction out of assets within the jurisdiction. In affidavits in support of the application the defendant stated that the net proceeds from the sale of the farm were Ј63,000, which had been transferred to Jersey a week before the Mareva injunction was granted, and that his assets within the jurisdiction totalled Ј154,000. The affidavits further disclosed that, contrary to his undertakings, he had reduced his assets within the jurisdiction by some Ј66,000 since the grant of the injunction and that he had no assets capable of producing the Ј15,000 a year which the court had permitted him to remove out of the jurisdiction for living expenses. The plaintiffs accordingly applied under RSC Ord 24, r 7(1)^a and Ord 26, r 1(1)^b for an order for discovery, inter alia, of (i) his assets as at the dates when the injunction was granted, when it was varied, and when discovery was ordered, and (ii) the details of the disposal of any assets between the variation of the injunction and the date of the order for discovery. At the hearing of both applications the judge allowed the defendant's application for a variation of the injunction in part by allowing him to pay solicitors' and accountants' fees out of assets which were subject to the injunction. The defendant was also allowed to continue to remove Ј1,250 per month for living expenses provided it came out of income and not capital. The judge also granted the plaintiffs' application for an order for discovery and stated that if

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discovery disclosed that the defendant had acted in breach of his undertakings given when the injunction was first varied the court would of its own motion treat that as a contempt of court. The defendant appealed against the order for discovery, contending (i) that the order was not within the ambit of Ord 24, r 7(1) or Ord 26, r 1(1) since it did not relate to 'matters in question in the action' within Ord 24, r 1(1)^c or to 'matters in question ... in the cause or matter' within Ord 26, r 1(1) but merely to the defendant's ability to satisfy a judgment if the matters in question in the action were decided against him, and (ii) that the order should not have been made because his answers might tend to incriminate him. The plaintiffs contended that the power to grant discovery or interrogatories in aid of a Mareva injunction was conferred by Ord 24, r 7(1) and Ord 26, r 1(1) or alternatively by s 45(1)^d of the Supreme Court of Judicature (Consolidation) Act 1925, and that in any event the court had an inherent residual jurisdiction to order discovery wherever the cause of justice required it.

Held - (1) Although orders for discovery and interrogatories in aid of a Mareva injunction could not be made under RSC Ord 24, r 7(1) or Ord 26, r 1(1) because they would not then relate to 'matters in question in the action' or 'matters in question ... in the cause or matter', they could be made under s 45(1) of the 1925 Act, since inherent and implicit in the power to grant an injunction contained in s 45, from which the Mareva jurisdiction derived, was the power to make all ancillary orders necessary to ensure the effectiveness of the Mareva jurisdiction (see p 575 b to j, p 576 b c, p 577 g to j, p 582 a to f, p 584 d e, p 585 a to d, p 586 a to d and p 587 e f, post); A v C [1980] 2 All ER 347 approved in part; The Siskina [1977] 3 All ER 803 distinguished.
   (2) The defendant was not entitled to complain about the grant of the order of discovery on the grounds that his answers to it might be self-incriminatory, because the appropriate time for making such an objection was when answering the order and not when the order was being made (see p 579 h j, p 580 g, p 582 h j and p 587 e f, post); Fisher v Owen (1878) 8 Ch D 645 applied; Rank Film Distributors Ltd v Video Information Centre [1980] 2 All ER 273 distinguished.
   (3) However (Griffiths LJ dissenting), the order for discovery made by the judge, by referring to the defendant's assets in the past and their disposal, was made not for the purpose of locating and freezing the defendant's remaining assets but to establish if and to what extent the defendant had not complied with the order varying the injunction or had breached the undertakings he had given, and was not therefore a proper order for discovery in aid of a Mareva injunction. The judge, although having jurisdiction to order discovery, had exceeded his powers in making the order he did. The defendant's appeal would be allowed and the order quashed (see p 579 f to g, p 180 h and p 586 j to p 587 b and e f, post).
   Per Stephenson and Ackner LJJ. If the plaintiff or the judge wishes to police a Mareva injunction to see whether the defendant is in breach of it or of any undertaking he has given the appropriate method is to order the defendant to be cross-examined on his affidavits under RSC Ord 38, r 2(3) or to deprive him of the right to take any money or possessions out of the jurisdiction unless and until he has made full disclosure of his assets (see p 579 c d and p 587 c d, post).
   Per Ackner LJ. The Mareva jurisdiction provides a limited exception to the general rule that the court will not normally grant an injunction to restrain a defendant from parting with his assets in order that they may be preserved in case the plaintiff's claim succeeds. The plaintiff, like other creditors of the defendant, must obtain his judgment and then enforce it. The Mareva jurisdiction is not a form of pre-trial attachment and

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the courts must be vigilant to ensure that a Mareva defendant is not treated as a judgment debtor (see p 577 a to e, post).

Facts
   The respondent company, the plaintiffs in the action, carry on business as stockbrokers. On 12 July 1979 they issued a specially indorsed writ for Ј217,077б42, being the balance of money which they alleged they lent from time to time to the defendant as his stockbrokers. RSC Ord 14 proceedings were threatened, but after a series of adjournments and special appointments this course was abandoned. The defendant delivered a defence and counterclaim, disputing the alleged debt on a number of bases, including the statutory defence provided by s 1 of the Moneylenders Act 1927 that the transactions relied on by the plaintiffs were nominee transactions and accusing the plaintiffs of negligence. It is accepted that the defence and counterclaim raise arguable points.
   Early last year the plaintiffs heard that the defendant had sold two farms and they made an ex parte application for an injunction restraining the defendant from removing from the jurisdiction or otherwise disposing of any of his assets, including in particular any moneys in his bank account, including the proceeds of the sale of Rocky Lane Farm, Henley, save in so far as the sum of his assets exceeded Ј250,000. The order was granted. When the matter was argued, inter partes, a week later, the point was taken on the defendant's behalf that so far from there being evidence that he was resident outside the United Kingdom the evidence filed by the plaintiffs established that he was resident in the United Kingdom. The defendant himself provided no evidence, but his wife swore an affidavit referring to the fact that she had been married to the defendant for 18 years, that they had three children and that he had for some five years, until he recently sold it, lived at Rocky Lane Farm. She stated that he was English, as are his father and mother, and that she and he had lived in England during the whole of their married life. The affidavit concealed that for some time they had not been happily married, that he had been close friends with a divorced lady and that he had decided to separate from his wife and go and live with this lady and her daughter in Monte Carlo and there start a new life.
   Notwithstanding the doubts whether the court then had jurisdiction to make a Mareva injunction where the defendant is resident in the United Kingdom, Kilner Brown J made an order on 18 March, but it restrained the defendant from removing from the jurisdiction 'or otherwise disposing out of the jurisdiction any of his assets etc'.
   The defendant entered a notice of appeal against the injunction, one of the grounds being 'the Defendant was based or resident in England or within the jurisdiction ... '
   This was probably only a tactical move because within a fortnight the defendant swore an affidavit in support of an application to vary the injunction and in that affidavit disclosed his domestic circumstances, which I have described above. He conceded that he had arranged for the sale of Rocky Lane Farm, but gave no information whether it has been sold and if so for how much. He denied that he had sold the other farm, Barnes Farm; this farm belonged to his mother and had been sold by her, he receiving no part of the proceeds. He explained that he had taken a lease for one year, with options to extend, of a flat in Monte Carlo where he and the lady and her daughter were to live, and the rent and service charge for which amounted to nearly Ј15,000 per year. He asserted that if he had remained he would have been free to spend as he had throughout his life,

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'my income from the investment of my assets wherever situated'. He explained that he would be willing to withdraw his appeal and accept that his assets be frozen within the jurisdiction if he was granted leave to take out of the jurisdiction his Citroen motor car, certain personal possessions and the income arising from the investment of his assets. He further stated that the income arising from the investments of such assets as he had out of the jurisdiction, which he did not particularise, would be insufficient even to pay the rent and service charges on the flat.
At the hearing of this application by Parker J on 28 April, the defendant's counsel, who has not appeared in this appeal, informed the judge that the decision taken to advance the contention before Kilner Brown J that the defendant was still genuinely resident within the jurisdiction was on his advice and that therefore no adverse inference should be drawn against his client. Counsel also informed the judge that the defendant's assets within the jurisdiction amounted to between Ј217,000 and Ј250,000 and that he was prepared to limit his claim to be allowed to remove income to the sum of Ј25,000 per annum.
The application to vary was largely successful. It was in the following terms:

Within a few months of the injunction being varied, a problem arose with regard to the second of the two undertakings referred to above. The injunction as ordered by Kilner Brown J in no way fettered the defendant's right to deal with his assets within the jurisdiction, in such manner as he thought fit. To meet the possible objection which might have been made by the plaintiffs to the variation sought, the defendant had been advised to give an undertaking that his assets would not be invested in any manner which was likely to depreciate their value, such an undertaking being designed to prevent him investing his capital in a wasting asset for the purpose of producing a very high income. However, the undertaking as incorporated in the order not to change the investment of his assets within the jurisdiction etc was capable of being construed so as to prevent the defendant meeting his financial obligations within the jurisdiction from his assets within the jurisdiction. The defendant's solicitors therefore sought the plaintiffs' solicitors agreement to his utilising the assets within the jurisdiction to discharge his commitments there. Understandably the plaintiffs' solicitors stated that before they could agree to any variation of the terms of the undertaking they must know the exact nature of the defendant's assets and the way in which they were invested, as well as the extent of his expenses and obligations in this country which he had to meet. The defendant's solicitors failed to provide this information. They however confirmed that their client was spending capital to meet his commitments in the jurisdiction 'to the extent that his remaining income in this country was insufficient'. They asserted, quite wrongly, that a Mareva injunction in standard form in no way prevents a defendant spending within the jurisdiction. They had apparently overlooked the terms of the ex parte order which was indeed in standard form.
On 28 October the defendant's solicitors filed an affidavit making the points referred to above and stated that their client's commitments involved the expense of his making occasional visits to England, paying his professional advisers and maintaining his wife and three children. They sought, on the defendant's behalf, a variation of the undertaking so as to enable the defendant to continue to honour his commitments within the jurisdiction out of his assets within the jurisdiction. The plaintiffs countered

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by giving notice that at the restored hearing of the summons they would apply, under RSC Ord 24, r 7(1) and Ord 26, r 1(1), for an order that the defendant should swear an affidavit which, as amended by the judge, obliged him to: (1) disclose the full value of his assets within the jurisdiction as at (a) 11 March 1980, (b) 28 April 1980, (c) the date of the order; (2) identify with full particularity the nature of his assets, including the identity of all bank or other accounts in his name and the sums presently standing in each account; (3) disclose in so far as the value of his assets do not now total between Ј217,000 and Ј250,000 all facts within his knowledge as to the present whereabouts of any assets said on 28 April 1980 to be included in that total, but not now so included, and further disclose how and when those assets came to be changed and/or disposed of; (4) identify in a written schedule all relevant documents material to the value, distribution and disposal or change of his assets between 11 March and the date of the order.
In an affidavit of 11 November the appellant set out his assets in England with their approximate values as follows:

This totalled Ј154,000. He then went on to state that on 28 April his total assets within the jurisdiction were worth approximately Ј220,000, that they had fallen since that date to the extent of approximately Ј66,000, such money having been spent by him entirely within the jurisdiction on: legal costs, Ј7,452; accountancy fees, Ј8,950; payments to his wife, approximately Ј15,000; payments for the helicopter, Ј25,000; and the cost of his visits to England, Ј6,000. He further stated that his commitments within the jurisdiction in the foreseeable future must inevitably be substantial both in relation to the legal costs of defending the proceedings, the advice from his accountants and his obligations to his wife, quite apart from the cost of visits to see his three children.
On 14 November he swore yet another affidavit, following criticism made at the initial hearing of his application on 13 November that his affidavit did not contain information with regard to his assets and liabilities out of the jurisdiction. In that affidavit he dealt, for the first time, with the proceeds of the sale of Rocky Lane Farm. He said the sale had been made in various lots, and completion took place on three separate dates, namely 3 March, 10 April and 25 April 1980, the total proceeds amounting to Ј532,500. Immediately after the sale on 3 March, that is a week before the ex parte Mareva injunction, he remitted Ј63,000 to a bank in Jersey. This he said was all he obtained from the sale of the farm because it was heavily mortgaged, part of the proceeds of the sale was paid to his wife in satisfaction of her claim and there were substantial farming and personal debts. No figures or other details were provided of the mortgage, the payment to the wife or the alleged debts.
Understandably when the matter came before Parker J on 17 November the defendant was subject to considerable criticism. He had commenced the proceedings by suppressing the fact that he had deliberately decided to leave the country and had removed one asset, namely the sum of Ј63,000 as soon as he possibly could. The only obvious income-producing asset which he had disclosed was Ј10,000 in the share and loan capital of Lowe Music Ltd, which clearly was incapable of producing Ј25,000 a year, or even the Ј15,000 a year which the court, by its order of 28 April, had

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permitted him to remove. The defendant was living in Monaco in premises which cost him nearly Ј15,000 a year to run, he was supporting the woman referred to above, her daughter and himself, as well as his wife at the rate of about Ј16,000 a year. Further, he was apparently running a helicopter and all this was being achieved without any substantial income. Further, he had reduced the value of his assets within the jurisdiction by some Ј66,000 despite the terms of his undertaking to the court. His affidavit was clearly evasive and deficient in essential particulars.
The judge, following the decision in Iraqi Ministry of Defence v Arcepey Shipping Co SA (Gillespie Brothers & Co Ltd intervening), The Angel Bell [1980] 1 All ER 480, [1981] QB 65, was prepared to allow the defendant to make payment from his assets in England to his solicitors and accountants in connection with the present proceedings, providing any such payments were notified to the plaintiffs seven days before the payment was made. He, however, varied the injunction by restraining the defendant from otherwise dealing with any of his assets within the jurisdiction, save as to the monthly sum of Ј1,250 provided for in the order of 28 April 1980, which sum, in accordance with that order, must come out of his income from his United Kingdom investments. Although the notice of appeal seeks the variation of this order, counsel for the defendant had conceded that the only point of attack is the judge's refusal to allow any payment out of assets within the jurisdiction to the defendant's wife. He accepts, however, that the judge was fully entitled to make the criticisms which he did of the defendant's conduct and of the deficiencies in his affidavit and to decide that unless and until he made proper disclosure to the court he should be obliged to make payments to his wife from his assets outside the jurisdiction. Accordingly, the essential subject matter of the appeal is the grant by the judge, subject to certain minor amendments, of the plaintiffs' application for discovery. Parker J accepted that some of the material sought in the application was already to be found in the affidavits before the court, but because of the deficiencies in those affidavits he decided that the matter must proceed de novo. He rejected the suggestion that because a Mareva injunction is not concerned with assets outside the jurisdiction it would be wrong to order discovery in respect of such assets. He accepted that in the ordinary way the foreign assets of a defendant may be irrelevant, but that, when a defendant comes before the court seeking to have certain payments excepted from the full ambit of a Mareva injunction already granted and to obtain certain freedom of movement, then it could be that the foreign assets are of vital importance. The judge also clearly had in mind that the defendant's activities since the order of 28 April might well disclose that he had acted in breach of the order and, in particular, of his undertaking recorded in that order and thus be in contempt of court. He therefore stated, at the conclusion of his judgment, that whether or not the plaintiffs saw fit to make any further application after the defendant had filed his affidavit pursuant to the order the court would, in the light of the affidavit, restore the matter if it appeared that the defendant was in contempt of court.

Discovery
A further step in the process of the evolution of the Mareva jurisdiction took place in A v C [1980] 2 All ER 347, [1981] 2 WLR 629. In considering what this case decided it is important to have in mind the basic facts and the remedies which were being sought. The plaintiffs claimed to be victims of a fraud, allegedly masterminded by the first defendant, but which implicated the second, third, fourth and fifth defendants. In their writ, they claimed against these five defendants damages for conspiracy to defraud and damages for deceit and against the fifth defendant damages for breach of warranty in the sum of Ј5б7 m. In addition, they also claimed to trace the sum of Ј383,872 which they said was paid under a mistake of fact induced by fraud into the account of the sixth defendant, a bank. There was no allegation of malpractice against the bank, but simply a claim to trace money into its hands, which the plaintiffs said was their property in equity. Before the issue of the writ the plaintiffs obtained, ex parte, a Mareva injunction against the first five defendants limited to Ј1б5m. They also obtained an injunction restraining all the defendants from disposing of the sum of Ј383,872 or any lesser sum standing to the credit of accounts in the name of any of the first five defendants or of another party (WL) at the sixth defendant (the bank). Two issues fell to be decided. These were (a) whether an order should be made that if the sum of Ј383,872 was no longer in WL's account at the bank each defendant should disclose all facts within their knowledge as to the present whereabouts of that sum, and (b) whether an order should be made requiring all the defendants to disclose to the plaintiffs forthwith the sums at present standing in accounts in the names of any of the first five defendants or WL at the bank. As regards (a) Robert Goff J described this as relating to the 'proprietary claim'. He held that in such cases there was good authority that the court may make orders with the purpose of ascertaining the whereabouts of missing trust funds. In London and County Securities Ltd v Caplan (26 May 1978, unreported) Templeman J made an order for the purpose of enabling the plaintiffs to trace property acquired by the defendant and so take steps to seize that property if it derived from their assets. In Mediterranea Reffineria573 Siciliana Petroli SpA v Mabanaft GmbH [1978] Court of Appeal Transcript 816, which was concerned with tracing the product of the plaintiff's assets, viz a cargo of oil, delivery of which was alleged to have been obtained without the production of bills of lading, Mocatta J made a sweeping order requiring directors and an employee of the defendant company to make full disclosure of certain specified facts on affidavits and directed that one of them should file an affidavit of documents. His order was upheld by the Court of Appeal, and Templeman LJ said:

Rules of the Supreme Court
   If and in so far as the judge relied for his power to make the order under the Rules of the Supreme Court, then I respectfully think he was in error. The documents which can be made the subject of discovery must relate 'to matters in question in the action': see Ord 24, r 1. Order 24, r 7(1), to which the judge drew specific attention and which the plaintiffs in the first three lines of their notice of intention to apply for discovery specifically invoked, although giving the court power at any time to make an order for discovery, in no way departs from Ord 24, r 1. In fact it provides (in r 7(3)) that an application for an order under this rule must be supported by an affidavit stating the belief of the applicant that the party from whom discovery is sought has, or at some time had, in his possession, custody or power the document, or class of document, specified or described in the application and that it relates to one or more of the matters in question in the cause or matter.
   Significantly, although invoking this rule, the plaintiffs did not seek to put in the requisite affidavit in support. The reason for such failure was no doubt attributable to the fact that the documents or class of documents in respect of which they sought discovery did not relate to one or more of the matters in question in the cause or matter. The value of the defendant's assets in March, April and November 1980, the nature of those assets, including the identity of all bank or other accounts in his name, and how he had dealt with those assets between March and November 1980 were not matters in question in the action or in the cause or matter (see the definitions of 'action', 'cause', and 'matter' in s 225 of the Supreme Court of Judicature (Consolidation) Act 1925). Order 24, r 8, provides that on the hearing of an application for an order under r 3, r 7 or r 7A the court shall refuse to make such an order if and so far as it is of opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs. It is pursuant to the terms of this rule that discovery (as well as interrogatories) solely for the purpose of impeaching the credit of the opposite party will not be ordered.
   As to interrogatories, the power to grant them is similarly circumscribed. Order 26, r 1(1), to which Robert Goff J made specific reference (see A v C [1980] 2 All ER 347 at 351, [1981] 2 WLR 629 at 633) and which was also invoked in the plaintiff's notice of application, provides that a party to any cause or matter may apply to the court for an order giving him leave to serve on any other party interrogatories relating 'to any matter in question between the applicant and that other party in the cause or matter'. Order 26, r 1(3) provides that on the hearing of such an application the court shall give leave as to such only of the interrogatories as it considers necessary, either for disposing fairly of the cause or matter or for saving costs. Quite apart from the somewhat unusual form adopted in this case by the plaintiffs to interrogate the defendant, the same general objection, mutatis mutandis, applies. The right to interrogate, although not confined to facts directly in issue, extends to any facts the existence or non-existence of which is relevant to the existence or non-existence of the facts directly in issue (per Lord Esher MR in Marriott v Chamberlain (1886) 17 QBD 154 at 163). Although it is not necessary that answers to interrogatories should be conclusive on the question at issue, it is enough that they should have some bearing on the question and that they might form a step in establishing liability (see Blair v Haycock Cadle Co (1917) 34 TLR 39 at 40 per Lord Finlay LC). None of the questions raised by the plaintiffs' application, or indeed those raised in A v C, had any relevance to establishing liability in the action.
   In my judgment the power to order discovery to ensure that the Mareva jurisdiction is properly exercised and thereby to secure its objective of preventing the defendant removing his assets from the jurisdiction and so stultifying any judgment given by the court in the action cannot be found in the Rules of the Supreme Court. This, to my mind, is by no means surprising, the jurisdiction having, for all practical purposes, only

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recently come to light. Counsel for the plaintiffs, while arguing valiantly for the proposition which I have just rejected, preferred to base the court's power first upon its inherent jurisdiction, and secondly on s 45 of the Supreme Court of Judicature (Consolidation) Act 1925, to which I have made reference above. I propose to deal with the latter point first.

Section 45
   Having regard to the authorities referred to above it is now clearly established that the power of the High Court under s 45(1) includes the power to grant an interlocutory injunction to restrain a party to any proceedings from removing from the jurisdiction or otherwise dealing with assets located within the jurisdiction where that party is, as well as where he is not, domiciled, resident or present within that jurisdiction. Clause 37 of the Supreme Court Bill is obviously designed to give statutory effect to those authorities. To my mind there must be inherent in that power the power to make all such ancillary orders as appear to the court to be just and convenient to ensure that the exercise of the Mareva jurisdiction is effective to achieve its purpose.
   The power now contained in s 45 of the 1925 Act was formerly contained in s 25 of the Supreme Court of Judicature Act 1873. It was referred to by Jessel MR in Beddow v Beddow (1878) 9 Ch D 89 at 93 as embracing the grant of an injunction 'in any case where it would be right or just to do so'. Applying that decision, Lord Denning MR in Rasu Maritima SA v Pertamina [1977] 3 All ER 324 at 333, [1978] QB 644 at 659-60 stressed that the section gives the court a very wide discretion to grant an injunction. Counsel for the defendant contends however that Siskina (Cargo owners) v Distos Compania Naviera SA, The Siskina [1977] 3 All ER 324, [1979] AC 210, and in particular certain observations made by Lord Diplock in his speech ([1977] 3 All ER 803 at 824, [1979] AC 210 at 256) prevent any ancillary order being made under s 45 in aid or support of the injunction granted under that section. He quotes in particular the sentence, 'The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action.' However, in my judgment, this overlooks the context in which this observation was made. In that case the cargo owners applied ex parte to a judge of the commercial court (a) for leave to issue a writ against the shipowner and to serve a notice of it out of the jurisdiction and (b) for an immediate interim injunction to restrain the shipowners from disposing of their assets within the jurisdiction of the High Court, including, in particular, the insurance proceeds in respect of the loss of the Siskina.
   The shipowners' were a Panamanian company. At no time had it any office or agent in England. The cargo owners were the owners of cargo laden on the Siskina, the only asset of the shipowners, which had become a total loss. The bills of lading issued in Italy by the shipowners on the shipment of the cargo contained a clause confirming exclusive jurisdiction on the court in Genoa. The application was granted ex parte. However, subsequently, an application was made before Kerr J to set aside the service of the writ and all subsequent proceedings. He granted the application because the cargo owner's claim for damages, whether based in contract or in tort, disclosed no cause of action in respect of which the court had any power to permit service of its process out of the jurisdiction under RSC Ord 11. There was therefore no substantive claim to pecuniary relief within the jurisdiction of the court to grant to which the Mareva injunction sought could be ancillary. In this context, what Lord Diplock was saying in the observation quoted above, and so strongly relied on by counsel for the defendant, was that you cannot obtain an interlocutory injunction unless there is some claim for substantive relief on which jurisdiction can be founded. It is, of course, common ground in this action that there is a substantive claim which founds jurisdiction. The plaintiffs are claiming to recover a large sum of money lent within the jurisdiction to the defendant. In my judgment therefore the decision in The Siskina and the basis for that decision is of no relevance to the issue whether there is inherent in the power to grant the Mareva injunction a power to make an ancillary order or orders to ensure the effective exercise of that power.

However, it must be borne in mind that the foundation of the jurisdiction is the need to prevent judgments of the court from being rendered ineffective by the removal of the defendant's assets from the jurisdiction. It provides a limited exception to the general rule that the court will not normally grant an injunction to restrain a defendant from parting with his assets so that they may be preserved in case the plaintiff's claim succeeds. The plaintiff, like other creditors of the defendant, must obtain his judgment and then enforce it. He cannot prevent the defendant from disposing of his assets pendente lite merely because he fears that by the time he obtains judgment in his favour the defendant will have no assets against which the judgment can be enforced. Were the law otherwise, the way would lie open to any claimant to paralyse the activities of any person or firm against whom he makes his claims, by obtaining an injunction freezing their assets (per Sir Robert Megarry V-C in Barclay-Johnson v Yuill [1980] 3 All ER 190 at 193, [1980] 1 WLR 1259 at 1262, referring to the Lister & Co v Stubbs (1890) 45 Ch D 1, [1886-90] All ER Rep 797 line of authority). The Mareva jurisdiction was not intended to rewrite the English law of insolvency in this way. The purpose of the Mareva jurisdiction was not to improve the position of claimants in an insolvency but simply to prevent the injustice of a defendant removing his assets from the jurisdiction which might otherwise have been available to satisfy a judgment. It is not a form of pre-trial attachment but a relief in personam which prohibits certain acts in relation to the assets in question (per Robert Goff J in Iraqi Ministry of Defence v Arcepey Shipping Co SA [1980] 1 All ER 480, [1980] 2 WLR 488 and Cretanor Maritime Co Ltd v Irish Marine Management Ltd [1978] 3 All ER 164, [1978] 1 WLR 966). It is therefore clear that, although the Mareva plaintiff, who has satisfied the guidelines set out by Lord Denning MR in Third Chandris Shipping Corpn v Unimarine SA [1979] 2 All ER 972 at 984, [1979] QB 645 at 668, and in particular has provided adequate grounds for believing that there is a risk of the defendant's assets being removed before the judgment or award is satisfied, is in a privileged position, this privilege must not be carried too far. The courts must be vigilant to ensure that the Mareva defendant is not treated like a judgment debtor. It was no doubt with this general principle in mind that Robert Goff J in A v C was at pains to point out that it would not be right to make general use of the power to enable the plaintiff to discover whether the defendant has any assets here. However, having established the existence of the assets, it may, in a particular case, be necessary for the proper exercise of the jurisdiction that the defendant should provide information about a particular asset in order for the jurisdiction to be properly exercised. Where, as in A v C, there are several defendants, the ancillary order might well be designed to obtain information which would enable the court to restrict the injunction to a particular account, and thus enable the judge to decide on what the Mareva injunction should bite.

Inherent jurisdiction
If I am wrong in concluding that s 45 provides the basis for the jurisdiction to make the type of ancillary order referred to above, then the question arises whether the court has an inherent or residual jurisdiction to make such an ancillary order. In so far as counsel for the plaintiffs contends that there is inherent jurisdiction in the court to make effective the remedies that it grants, this seems to me merely another way of submitting that, where the power exists to grant the remedy, there must also be inherent in that power the power to make ancillary orders to make that remedy effective. This I have accepted. However, if and in so far as he contends that the courts have a general residual discretion to make any order necessary to ensure that justice be done between the parties, then in my judgment that is too wide and sweeping a contention to be acceptable. Such a proposition would seem to come well within the criticism made by Lord Hailsham in The Siskina [1977] 3 All ER 803 at 829, [1979] AC 210 at 262. Support for this general proposition was sought from what are now known to be Anton Piller orders and, in particular, from the observations of Lord Denning MR in Anton Piller KG v Manufacturing Processes Ltd [1976] 1 All ER 779 at 783, [1976] Ch 55 at 61. The source, however, of the Anton Piller orders was the decision of Templeman J in EMI Ltd v Pandit [1975] 1 All ER

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418, [1975] 1 WLR 302. It concerned the power of the court to make ex parte orders requiring a defendant to permit the inspection of articles or documents. The difficulty which was sought to be overcome, which in no way arises in this case, was the requirement in Ord 29, r 2(5) that an application for an order for inspection, detention, preservation etc of the subject matter of the cause or matter was to be made 'by summons or by notice'. The reason for the order being sought ex parte was because of the very serious risk that once the defendant was given notice of the application he would destroy the articles or documents and thereby defeat the very purpose of the action. The problem therefore was an entirely different one. Templeman J concluded that, if it appears that the object of the plaintiff's litigation would be unfairly and improperly frustrated by the very giving of the notice which is normally required to protect the defendant, there must be exceptional and emergency cases in which the court can dispense with the notice and, either under power in the rules to dispense with notice or by the exercise of its inherent jurisdiction, make such a limited order, albeit ex parte, as will give the plaintiffs the relief which they would otherwise be unable to obtain (see [1975] 1 All ER 418 at 421, [1975] 1 WLR 302 at 305). The authorities to which Templeman J referred do not appear to me to support the existence of the wide residuary discretion claimed by counsel for the plaintiffs to exist. I do not therefore consider that the Anton Piller line of authorities assist him. However, in view of the opinion which I have expressed in relation to s 45, he does not require to establish the existence of such residual power.

The order made in this case
   Given that there is power to make an order for discovery in 'aid' of a Mareva injunction in the limited sense which I have sought to describe above, the question next arises whether the order made by Parker J was such an order. I can find no suggestion that he was seeking to rely on s 45 of the 1925 Act, save in so far as he was relying on the decision in A v C. On the face of it, he was purporting to grant an application for discovery and interrogatories made pursuant to the Rules of the Supreme Court. However, this would be no valid basis for attacking his order, if he had jurisdiction to make the same order under s 45.
   In order to appreciate the nature and purpose of the judge's order it seems to me necessary to consider again what the defendant had disclosed with regard to his assets in England in the two affidavits of 11 and 14 November, which the judge justifiably found to be evasive and unsatisfactory. The defendant deposed that assets to the value of Ј154,000 were within the jurisdiction. As stated above they consisted of freehold agricultural land, a helicopter, a farm tractor, a debt, shares, money held by his solicitors on account of costs and a bank account in the sum of Ј3,500. Further, the defendants assets had been worth Ј220,000 approximately some six months earlier when the defendant had last appeared before the judge. Since then he stated that he had expended approximately Ј66,000 on legal costs, accountancy fees, payments to his wife, payments for the helicopter and visits to England as described previously in this judgment. To my mind, there was no necessity for making any order ancillary to the Mareva injunction in order to ensure the proper exercise of that jurisdiction. It was not suggested by the plaintiffs that they were particularly interested in the identity of the bank where approximately 1¹/₂ of the defendant's assets were to be found. There was no question as to on what property the Mareva injunction was to bite. It was to operate in relation to all the assets referred to above.
   Apart from the lack of information given in regard to these assets, the judge was clearly concerned, and rightly concerned, at the lack of any income-producing asset apart from the Ј10,000 in the share and loan capital of Lowe Music Ltd. This was most unlikely to produce the Ј25,000 per year income which the defendant had wished to take out of the country, or even the Ј15,000 per year which the judge had permitted to be removed from the jurisdiction when he varied the order inter partes on 28 April 1980. He was also concerned with the apparent breaches by the defendant of his

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undertaking. Anticipating that the affidavit which he had directed the defendant to provide might disclose that the defendant had been guilty of contempt of court, he stated in his judgment that when the affidavit had been filed the plaintiffs were, of course, at liberty to make a further application to the court with regard to the defendant's operations since the undertaking was given. Whether or not they saw fit to make any further application, if it appeared to the court that the affidavit did not contain proper disclosure in accordance with the order, or proper explanation of the defendant's conduct with regard to the hearings on 18 March, and with regard to the undertaking, then the court would appoint a day when the matter of possible contempt of court and the appropriate steps to be taken, if such contempt was shown, should be considered.
   Counsel for the plaintiffs submits that Parker J was seeking, by his order, to police the Mareva injunction which he had granted and that this was therefore an order made 'in aid of' the Mareva injunction.
   I cannot accept this view. If the plaintiffs, or the court of its own volition, desired to 'police its order', then the plaintiffs could have applied for an order for the cross-examination of the defendant on his affidavit, or the court itself could have made such an order (see Ord 38, r 2). No such application was made by the plaintiffs and no such initiative was taken by the court. From the plaintiffs' point of view, this of course is understandable enough, since their concern was not the committal of the defendant to prison, but the preservation of his assets, so as to avoid the prospect of a barren judgment. But there was another remedy open to them, or to the judge. The order of 28 April varying the Mareva injunction and allowing the defendant to remove Ј1,250 per month from the jurisdiction appears to have been obtained without proper disclosure to the court of the true position of the defendant's assets. The plaintiffs could have applied for the withdrawal and the judge of his own initiative could have withdrawn from the defendant the permission to remove any further money from the jurisdiction unless and until he made a full and proper disclosure of those matters which the court thought were necessary to establish the true nature of his assets, and he had given a proper explanation of his conduct between the material dates. The plaintiffs made no such application, and the judge, somewhat surprisingly, so far from removing permission from the defendant to take Ј1,250 per month out of the jurisdiction permitted him, on terms, to pay from his assets within the jurisdiction legal and accountancy costs relating to the action.
   In short, while fully indorsing and approving the judge's desire to put an end to the defendant's evasiveness and to establish to what extent if at all there had been non-compliance with his order, or breaches by the defendant of his undertaking, I do not consider that he had the jurisdiction to achieve it by the order which he made. Having regard to the existence of the remedies available to the plaintiffs to 'police' the order that they had obtained, it would, in my judgment, be quite wrong to seek to create new machinery which could have far-reaching and undesirable consequences and which are quite unnecessary for the proper operation of the Mareva jurisdiction.
   In the light of the views expressed above it is unnecessary for me to deal with the defendant's submission that, as the answers to the interrogatories ordered could incriminate him, the order should never have been made. However, in deference to the arguments which have been addressed to us I will shortly express my views on this submission.
   It has long been established that the fact that the answer to interrogatories sought to be administered would or might tend to incriminate the party interrogated is no ground to objecting to leave being given to administer them (see Fisher v Owen (1878) 8 Ch D 645 and the other cases cited in the Supreme Court Practice 1979, vol 1, p 450, para 26/1/16). The objection to answer on this ground must be taken in the answer. The only exception to this general rule arises in an action to recover a penalty (see Hunnings v Williamson (1883) 10 QBD 459). I do not consider that Rank Film Distributors Ltd v Video Information Centre [1980] 2 All ER 273, [1980] 3 WLR 487 in any way detracts from the general rule referred to above. In that case the plaintiffs, who were film companies

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owning the copyright to films produced and made by them, believed the defendants were pirating copies of those films and recording and selling unauthorised video cassettes of them. They obtained Anton Piller orders which went beyond requiring the defendants to permit forthwith representatives of the plaintiffs to enter premises occupied by the defendants for the purpose of inspecting and removing any unauthorised films. The orders further required three of the defendants to disclose (a) the names and addresses of persons who supplied the cassettes and customers who bought them, (b) all invoices and other documents relating to the cassettes and (c) the whereabouts of all pirate cassettes and master copies known to the defendants. These were peremptory orders for discovery and interrogation requiring instant obedience and the defendants were informed by the penal notice on the order that disobedience would expose them to penal consequences. This was therefore no ordinary order for discovery or interrogatories where the party interrogated has the opportunity to consider and take legal advice before deciding whether to comply with the order (see [1980] 2 All ER 273 at 288-289, [1980] 3 WLR 487 at 515 per Templeman LJ). It was accordingly held by the majority of the Court of Appeal that that part of the orders requiring disclosure was contrary to the well-established principle of privilege against self-incrimination and would accordingly he expunged.
Counsel for the defendant further sought to rely on Comet Products UK Ltd v Hawkex Plastics Ltd [1971] 1 All ER 1141, [1971] 2 QB 67. That was a passing-off action in which the plaintiffs had obtained an interim injunction restraining the defendants from passing off their product as the plaintiffs'. Before the trial of the action, the plaintiffs alleged that the defendants were guilty of contempt of court in disobeying the injunction and applied for the committal of the second defendant to prison for his contempt. On the hearing of the application affidavits were filed on each side and were read. The plaintiff sought an order to cross-examine the defendant on his affidavit, such application being made under Ord 38, r 2, which gives the court discretion to make such an order. It is clear from all the judgments of the Court of Appeal that, if the cross-examination was to have been limited to the particular circumstances of the alleged contempt, then it would have been right to have ordered the cross-examination. It is only in very exceptional cases that a judge ought to refuse an application to cross-examine a defendant on his affidavit (see [1971] 1 All ER 1141 at 1147, [1971] 2 QB 67 at 77 per Cross LJ). In the Court of Appeal however, notwithstanding that counsel for the plaintiff had told the judge he did not wish to cross-examine on the subject of the main action, it became apparent that a much wider cross-examination was intended in which the whole circumstances of the alleged passing off was to be investigated. The court accordingly held that as a matter of discretion the cross-examination ought not to be allowed. Again, this case does not detract from the general principle to which I have referred above that if the answers to interrogatories may tend to incriminate, that is no valid objection to the order for the interrogatories. The objection must be taken when the time comes to answer them.
For the reasons given I would accordingly allow this appeal. The defendant's victory may well be a hollow one, since the plaintiffs will, I anticipate, pursue the remedies to which I have made reference, and restore the matter to Parker J with a view to his either ordering the cross-examination of the defendant and/or varying the Mareva injunction should he think fit.

GRIFFITHS LJ. Until recently the courts have refused to grant an injunction to freeze the assets of a defendant in anticipation of the plaintiff obtaining judgment against him. This general rule is long standing and well established by such authorities as Lister & Co v Stubbs (1890) 45 Ch D 1, [1860-90] All ER Rep 797.
However, in 1975 an exception to this general rule appeared which came to be known as the Mareva injunction, taking its name from the decision of this court in Mareva Compania Naviera SA v International Bulkcarriers SA (1975) [1980] 1 All ER 213. If the court is satisfied that there is a real risk that a defendant will remove his assets from the jurisdiction so that a successful plaintiff will be unable to issue execution against them

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and thus be left with a barren judgment it will issue an injunction to restrain the defendant from removing sufficient of his assets from the jurisdiction to protect the plaintiff from this risk. At first the Mareva injunction was only granted against a defendant resident outside the jurisdiction, but it has recently been extended to include a resident within the jurisdiction, provided there is a real risk that he intends to defeat the plaintiff's claim by removing his assets from the jurisdiction (see Prince Abdul Rahman Bin Turki Al Sudairy v Abu-Taha [1980] 3 All ER 409, [1980] 1 WLR 1268). Although the primary purpose of the Mareva injunction is to prevent the defendant removing his assets from the jurisdiction and thus out of reach of execution, the form of order generally prevents the defendant not only from removing his assets from the jurisdiction but also from otherwise dealing with them within the jurisdiction. The latter part of the order is made in order to prevent the defendant passing on his assets to a third party who then takes them out of the jurisdiction. To mitigate the obvious hardship that may be caused to a defendant if a large part of his assets are completely frozen the court will be prepared to vary the order to enable the defendant to use his assets for legitimate trading and other purposes within the jurisdiction (see Iraqi Ministry of Defence v Arcepey Shipping Co SA, The Angel Bell [1980] 1 All ER 480, [1981] QB 65).
   The power to make the Mareva injunction is derived from s 45(1) of the Supreme Court of Judicature (Consolidation) Act 1925 on the grounds that such an order is 'just and convenient'. Counsel for the defendant has referred to passages in the speeches of Lord Diplock and Lord Hailsham in Siskina (Cargo owners) v Distos Compania Naviera SA, The Siskina [1977] 3 All ER 803, [1979] AC 210 which he submits cast doubt on the power of the court to grant a Mareva injunction. But the power to make a Mareva injunction was not directly in question in that case and whatever may be the outcome if the matter is finally tested in the House of Lords it must for the moment be taken as settled by decisions of this court that such a power exists.
   The first question that arises in this appeal is whether the court has jurisdiction to make an order for discovery in aid of a Mareva injunction. Counsel for the defendant concedes that it is desirable that the court should have such jurisdiction but submits that it does not. Until Robert Goff J made an order for discovery in A v C [1980] 2 All ER 347, [1981] 2 WLR 629, it seemed that the jurisdiction had been exercised successfully without the defendant being ordered to give discovery. The plaintiff must be able to satisfy the court that the defendant has assets within the jurisdiction in order to obtain the injunction and in most cases will probably be able to identify those assets with sufficient particularity to enable the court to make an effective order. In such cases there is no need for discovery, and it would be most oppressive to make an unnecessary order for discovery merely to harass the defendant. However, from time to time cases will arise when, although it seems highly probable that the defendant has assets within the jurisdiction, their precise form and whereabouts are in doubt, or in the case of a number of defendants they may collectively have sufficient assets but there may be doubt about their distribution among themselves. In such cases in order that the Mareva injunction should be effective both the court and the plaintiff require to know the particular assets on which the order should bite. It must be remembered that the underlying reason for making the order is the fear that the defendant may remove his assets and this is most effectively prevented by the plaintiff serving a copy of the injunction on whoever is holding the defendant's assets for the time being. Very often this will be the defendant's bankers, but assets can take many forms and be in the hands of many different persons to whom it is desirable to give notice of the court's order. To my mind the desirability of the power to order discovery is obvious and it is particularly needed in the case of a defendant who has demonstrated himself to be untrustworthy and evasive. But the question remains: does the power exist?
   In this case the plaintiffs applied for and it appears to me the judge made his order in purported exercise of his powers to make an order for discovery of particular documents under RSC Ord 24, r 7(1) and to administer interrogatories under Ord 26, r 1. In doing so he followed the decision of Robert Goff J in A v C. The form of the order he made is fully set out in the judgment of Ackner LJ. It is an order for discovery of both

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documents and facts in wide terms and certainly does not follow the type of order normally made in applications either for discovery of particular documents or for interrogatories.
   I agree that the Rules of the Supreme Court give no power to a judge to make such an order.
   In both the case of discovery of documents and discovery of facts by way of interrogatories the discovery has to relate 'to matters in question in the action' or 'cause or matter' (see Ord 24, r 1(1) and Ord 26, r 1(1)) and these words must also be read into Ord 24, r 7(1), by necessary implication arising from the fact that an application for particular discovery under r 7(1) must be supported by affidavit stating that documents relate to matters in question in the cause or matter (see r 7(3)).
   The phrases 'matters in question in the action' and 'matters in question ... in the cause or matter' have for generations been understood to refer to the issues to be decided in the litigation. The present existence and whereabouts of the defendant's wealth are not such an issue; they are relevant only to the defendant's ability to satisfy judgment if the 'matters in question in the action' are resolved in the plaintiff's favour. I therefore conclude that the judge had no power to order discovery pursuant to the rules of court and in so far as A v C was founded on such a power it was wrongly decided.
   However, in A v C Robert Goff J derived the power to order discovery not only from the rules but also from the power to make the injunction under s 45 of the Supreme Court of Judicature (Consolidation) Act 1925. Counsel for the plaintiffs relies on this power to support the judge's order. If the court has power to make a Mareva injunction it must have power to make an effective Mareva injunction. If the injunction will not be effective it ought not be made.
   For the reasons I have already given it may be necessary to order discovery to make the injunction effective and I would hold that the court has the power to make such ancillary orders as are necessary to secure that the injunctive relief given to the plaintiff is effective. I therefore agree that a judge does have power to order discovery in aid of Mareva injunction if it is necessary for the effective operation of the injunction.
   I feel it unnecessary to express any view on counsel's wider argument based on the inherent jurisdiction of the court to order discovery wherever the cause of justice requires it.
   Assuming that the judge had power to order discovery ought he to have done so on the facts of this case? Counsel for the defendant submits that the judge should not have ordered discovery because it was not necessary to do so and because its primary purpose was not to aid the exercise of the Mareva jurisdiction but to force the defendant to provide material on which he could be punished for contempt of court.
   I will deal first with the objection on the ground of self-incrimination. It is true that the judge expressed disapproval of the defendant's behaviour in the proceedings and referred to the possibility of his being in contempt of the court's order. But this possibility must have been present to the minds of all those engaged in the litigation. The defendant's solicitor had himself referred to the possibility in the course of the correspondence. If I thought that this order for discovery was made merely to provide the material for contempt proceedings I would not hesitate to set it aside; it would clearly be an improper exercise of the power and offend against the principle that a man cannot be required to incriminate himself. I cannot accept that the judge made his order with this objective. The fact that an answer to an interrogatory may tend to incriminate the maker is no ground for disallowing the interrogatory; objection on this ground is to be taken in the answer (see the Supreme Court Practice 1979, vol 1, p 450, para 26/1/16 and cases there in cited). It will be open to the defendant to take objection on this ground when he comes to swear his affidavit in this case, if he considers it in his best interests to do so. This is a very different case to Rank Film Distributors Ltd v Video Information Centre [1980] 2 All ER 273, [1980] 3 WLR 487 in which the defendants were ordered to give discovery and answer interrogatories backed by a penal order, and I see nothing to take it out of the general rule that it is for the defendant to take his objection on the grounds of self-incrimination when he swears his affidavit. But the question remains, was this

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order properly made in aid of the Mareva injunction? Here I have the misfortune to differ from Stephenson and Ackner LJJ.
   The power to order a Mareva injunction is discretionary and it follows that the power to order discovery as an ancillary order to the injunction must also be discretionary. This Court should only interfere with the exercise of the judge's discretion if satisfied that it has been wrongly exercised; it is not sufficient that members of the court might not have been disposed to exercise the discretion in a similar manner.
   The judge was clearly dealing with a very evasive litigant. The affidavits he had put before the court did not begin to make economic sense. Here was a man seeking leave to take Ј25,000 a year out of the jurisdiction from the income produced by his assets, yet swearing affidavits which revealed no assets capable of producing anything approaching that sum, and at the same time telling the court that he had already reduced his assets by Ј66,000 since the Mareva injunction was first granted. Furthermore the court had been misled as to his residence outside the jurisdiction at the hearing in March and he was now seeking to justify the dissipation of his assets since April 1980 on a strained and, in my view, clearly wrong construction of the undertaking he had given to the court at that hearing.
   The judge was, in my opinion, fully justified in taking the view that the defendant's affidavits as to his assets were so unsatisfactory that he was entitled to refuse to accept their contents at their face value and to order the defendant to make a full disclosure of his financial position. It was a measure that I think was justified to enable the court and the plaintiffs to identify the assets and to give the plaintiffs the opportunity to serve a copy of the court's order on the bank or other holders of the assets or take such other steps as they consider appropriate to ensure that the Mareva order did effectively bite on the defendant's assets.
   It is true that the judge might have used other measures to put pressure on the defendant to induce him to reveal the true state of his finances. He could have ordered him to come from Monte Carlo to be cross-examined on his affidavits, involving him in considerable expense and inconvenience. He could have refused to allow him to continue to take any income out of the jurisdiction for his living expenses in Monte Carlo. He could have refused to allow him to draw money to pay his solicitors or accountants. The fact that these alternative courses were open to the judge does not appear to me to be any reason why he should not order discovery if he considered that to be the more appropriate course. It is not without significance that the plaintiffs did not ask the judge to consider any of these alternatives. The plaintiffs are not concerned to punish the defendant or put him to any unnecessary inconvenience; all they want is to be able to identify and protect sufficient of the defendant's assets to satisfy the judgment they hope to obtain against him.
   I agree that the power to order discovery in support of a Mareva injunction should be sparingly exercised and if too readily resorted to could easily become a most oppressive procedure.
   I am sure that the judges in the Commercial Court have this well in mind. There should be no question of an order for discovery becoming a usual part of the Mareva relief. However, for the reasons I have indicated I am of the opinion that the judge was fully justified on the facts of this case in ordering this evasive defendant to give full discovery. I would have dismissed the appeal.

STEPHENSON LJ. If the defendant is regarded with suspicion by the court, he has only himself to blame. It is hard to conceive a more naked attempt to mislead the court than his filing of his wife's affidavit, and his own affidavits have understandably not reduced but increased the suspicions which led Parker J to make the robust order under appeal. I would be reluctant to quash a robust order thought necessary by a commercial judge to make effective such a valuable weapon in the court's armoury as a Mareva injunction.
But a court of law can only do what it has power or jurisdiction to do. It is as important that it should not exceed its powers to interfere in the lives of private citizens

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and to compel them to make public what they may wish to keep private as that it should use them to the full to protect and enforce private and public rights and restrain their destruction or infringement. Injustice comes from abuse of power, judicial power included, as well as from failure to exercise it. Counsel for the defendant has submitted powerful arguments that the judge had no power to order the discovery which he has required the defendant to make. The courts have, many would say, stretched their powers beyond what were long considered their limits in granting Mareva injunctions; it would be an unlawful extension to add to a Mareva injunction an order for discovery, even if necessary to make it effective; the limits of the court's powers to grant interlocutory remedies and relief, in particular discovery, are defined by statute and rules made under statute; such discovery is outside the relevant statute and rules and can only be derived from the court's inherent jurisdiction and that jurisdiction, he submits, is to be found only in the authority of established practice and decided cases; there is no established practice and no decided case, except a recent decision at first instance which the judge followed and we are asked to overrule.
   The plaintiffs applied for this order under RSC Ord 24, r 7(1) and Ord 26, r 1(1). The judge did not say what the power was under which he made the order; but he said that their application was based on the decision in A v C [1980] 2 All ER 347, [1981] 2 WLR 629, which is the decision counsel for the defendant wishes us to overrule. In that case Robert Goff J based his decision on s 45 of the Supreme Court of Judicature (Consolidation) Act 1925, as well as on those rules, and it may therefore be right to treat this order as based on that section as well as on those rules. While contending for the plaintiffs that it could rightly be based on either the Act or the rules, their counsel asked us to affirm the judge's order primarily on the ground that it was within the court's inherent jurisdiction.
   I am not satisfied that either the Act or the rules give the court this power.
   Section 45(1), replacing s 25(8) of the Supreme Court of Judicature Act 1873, provides:

   As I read these definitions 'matters' are wide enough to include 'causes' and 'causes' to include 'actions'. But the judge's order was applied for and made in an action, the action between the plaintiffs and the defendant and the matters (in a different sense) in question between these parties to which discovery must relate are matters in issue in the action between them. The matters in question in the Mareva injunction are not in issue in the action. The plaintiffs do not have to prove the existence of assets of the defendant within the jurisdiction and the risk of their being removed out of the jurisdiction in order to prove their case or obtain judgment; the plaintiffs want the injunction and discovery in aid of it in order to preserve something out of which any judgment they may obtain on proving their case can be executed and satisfied. That is the matter in question to which this discovery relates.
   I therefore reject counsel for the plaintiffs' submission that discovery relating to a matter in question in an application for a Mareva injunction is discovery within Ord 24 or Ord 26. The plaintiffs' application, though made under Ords 24 and 26, was not supported by an affidavit as an application for further discovery is required to be by Ord 24, r 7(3). The requirements in Ord 24, rr 2(5), 8 and 13(1) and Ord 26, r 1(3) that discovery or interrogatories must be necessary for disposing fairly of the action or of the cause or matter are intended to restrict discovery and cannot be interpreted to extend it.
   I am therefore of opinion that we can only affirm the judge's order on a ground on which he did not base it any more than Robert Goff J based his order on it in A v C, namely the inherent jurisdiction of the court.
   Counsel for the defendant has submitted that the court's inherent jurisdiction is very limited. It has inherent jurisdiction in the four cases which can be derived from the index to the Supreme Court Practice 1979 (vol 1, p 1768) and in no others. The first two are its power to strike out or stay proceedings which are frivolous or vexatious or an abuse of its process, two aspects of a jurisdiction now recognised by Ord 18, r 19 and s 41 of the 1925 Act respectively. The third is the power to join other persons to proceedings between parties before it, a jurisdiction recognised by Ord 15, r 6(2). And the fourth is the recently assumed power to make preservation and inspection orders under Ord 29, r 2, ex parte in cases of emergency: see EMI Ltd v Pandit [1975] 1 All ER 418, [1975] 1 WLR 302 and Anton Piller KG v Manufacturing Processes Ltd [1976] 1 All ER 779, [1976] Ch 55. But these are, except the last, powers recognised as appertaining to the courts of Chancery or common law before the Supreme Court of Judicature Acts 1873 and 1875, and the Anton Piller injunction is merely an exercise ex parte of an old power, comparable perhaps with the extension made by the Mareva injunction but certainly not with the addition made by the judge's order for discovery.
   It is, however, significant that those curious enough to consult the index to the Supreme Court Practice 1976 (vol 1, p 1728) would find there only a reference to the first two instances of inherent jurisdiction, and the additional references in the 1979 edition would indicate that the court's inherent jurisdiction may be an uncertain expression loosely used and signifying a discretionary power which may be developed to meet circumstances not known to nineteenth century judges.
   Such authorities as China Transpacific Steamship Co v Commercial Union Assurance Co (1881) 8 QBD 142, Hunnings v Williamson (1883) 10 QBD 459, North London Railway Co v Great Northern Railway Co (1883) 11 QBD 30 and Re Wickham, Marony v Taylor (1887) 35 Ch D 272 clearly show what, a hundred years ago, judges of the newly constituted Court of Appeal understood to be the effect of the Judicature Acts and the rules made thereunder; the Rules of the Supreme Court did not cover every matter or define the jurisdiction of the Supreme Court completely, but that jurisdiction remained what it was in the hands of the courts of Chancery and common law before the Acts and rules; what they could do was neither cut down nor extended thereby. How far those authorities imprison the courts a century later or fossilize their practice is a question which cannot be answered without considering the Anton Piller and Mareva lines of cases. But the House of Lords has reiterated the old requirement that injunctions must protect a legal or equitable right, a substantive cause of action in law or equity, in The Siskina [1977] 3

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All ER 803, [1979] AC 210 and even more recently in Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corpn [1981] 1 All ER 289, [1981] 2 WLR 141. Somehow the Mareva injunction must be considered to come within this pre-Judicature Acts restriction, and so the A v C ancillary order for discovery could also come within it. In my judgment a judge has the duty to prevent his court being misused as far as the law allows, but the means by which he can perform that duty are limited by the authority of Parliament, of the rules of his court and of decided cases. Those means do, however, include what is reasonably necessary to effectively performing a judge's duties and exercising his powers. In doing what appears to him just or convenient he cannot overstep their lawfully authorised limits, but he can do what makes their performance and exercise effective. He has a judicial discretion to implement a lawful order by ancillary orders obviously required for their efficacy, even though not previously made or expressly authorised. This implied jurisdiction, inherent because implicit in powers already recognised and exercised, and so different from any general or residual inherent jurisdiction, is hard to define and is to be assumed with caution. But to deny this kind of inherent jurisdiction altogether would be to refuse to judges incidental powers recognised as inherent or implicit in statutory powers granted to public authorities, to shorten the arm of justice and to diminish the value of the courts.
   Whether the court has inherent or implied power to grant a Mareva injunction in its ordinary form of restraining a defendant from removing his assets outside the jurisdiction or disposing of them within the jurisdiction is no longer an open question in this court, and it has received recognition in cl 37 of the Supreme Court Bill now before Parliament. There is no statute directly conferring it, like s 37 of the Matrimonial Causes Act 1973. So it must be presumed to have been within s 45 of the 1925 Act, its express words or by necessary implication. Whether the court has such power to make such an order for discovery in aid of such an injunction as was made by Robert Goff J in A v C is still, however, an open question in this court, because although it has twice been accepted in this court, in neither case was its validity challenged in argument and I was wrong to imply in the latter case that it had been approved in the former: see Bankers Trust Co v Shapira [1980] 3 All ER 353, [1980] 1 WLR 1274 and Smith v Hegard [1980] Court of Appeal Transcript 603 decided by a court consisting of Ackner LJ and myself on 7 August 1980. I was also wrong to describe Robert Goff J's order in A v C in aid of a Mareva injunction as an Anton Piller order: it was an order for discovery and inspection inter partes which purported to be made under s 45 of the 1925 Act (rightly) and under RSC Ords 24 and 26 (wrongly), but not under Ord 29, r 2 as was Stocker J's order under appeal in Smith v Hegard. That order we set aside as an unjustified 'fishing' attempt to restore and 'police' a Mareva injunction, which had been discharged, by discovery of dealings within the jurisdiction, to reveal breaches of such a non-existent injunction, or of an undertaking which had been offered but refused, and to secure a form of attachment against a potential judgment debtor which should have been obtained, if at all, by conditional leave to defend in Ord 14 proceedings. It was a wrong exercise of jurisdiction, whether or not the judge had it, to pile Piller on Mareva in the circumstances of that case.
   In that case both members of this court approved but distinguished Robert Goff J's decision in A v C as necessary to the proper and effective exercise of the Mareva jurisdiction for the reason (it may have been the second reason) that he gave, which Ackner LJ has read (see [1980] 2 All ER 347 at 352, [1981] 2 WLR 629 at 634), namely that the case involved a number of defendants and it was necessary to know the amount standing in their accounts with the identified bank so as to exclude from the restriction of the overall injunction any account or accounts providing moneys exceeding the amount of the plaintiff's claim.
   Parker J described the plaintiffs' application and his order for discovery as in aid or support of the Mareva injunction and so in a sense they were. But in so far as they relate to the defendant's assets at past dates as distinct from their present whereabouts their purpose seems to be not so much to help the court or the defendant to locate and 'freeze'

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particular assets now as to open the way to incriminating and ultimately punishing the defendant for contempt of court in formerly disobeying the Mareva injunction and/or breaking his undertaking. This purpose emerges not only from the wide terms of the order but from the judge's comments at the end of his judgment. To that extent the order goes beyond the legitimate purpose of an order for discovery in aid of a Mareva injunction and Robert Goff J's order in A v C and is not necessary for the proper and effective exercise of the Mareva injunction.
   It was, however, the defendant himself who first made and invited discovery by giving the court information (which was obviously incomplete and evasive) about his assets in his affidavit of 16 April 1980 in support of his application to vary the Mareva injunction. It was that imperfect discovery which led the plaintiffs to apply for the further discovery ordered by Parker J and to the defendant giving further discovery (still imperfect) by his affidavits of 1 and 14 November 1980. Why, matters having gone thus far without apparent objection by the defendant, should they not be pursued to the point of completion required by the judge's order?
   In my judgment they have gone far enough in aid of the Mareva injunction and should be pursued or completed, if desired, by cross-examination on the defendant's existing affidavits, not as the judge indicated on a further affidavit. The defendant has already been warned by the judge that he may possibly be in contempt of court, but on the authorities cited by Ackner LJ that is no reason for not ordering him to attend for cross-examination under Ord 38, r 2(3), though it may enable him to refuse to answer questions put to him in cross-examination. And he is, in my opinion, liable to be deprived of the right given him by the order of 18 April 1980 to take income or possessions out of the jurisdiction unless and until he makes full and proper disclosure of his assets. The judge had jurisdiction to order discovery but exceeded his powers by making the order for discovery under appeal.
   For these reasons I feel bound to differ with some hesitation from Parker J's order, particularly as it has been so cogently supported by Griffiths LJ, and to concur with the order proposed by Ackner LJ that the appeal be allowed and with, in substance, all the reasons he gives for that conclusion.



(d)	a farm tractor	Ј6,500
(e)	a debt owed to him	Ј7,000
(f)	share and loan capital in Lowe Music Ltd	Ј10,000
(g)	money held by solicitors on account of costs	Ј4,160



(a)	freehold agricultural land	Ј75,000
(b)	a bank account	Ј3,500
(c)	a helicopter	Ј48,000