The Financial Services Authority v Sinaloa Gold Plc (t/a PH Capital Invest Glen & Ors [2011] EWCA Civ 1158 (18 October 2011)

The Financial Services Authority v Sinaloa Gold Plc (t/a PH Capital Invest Glen & Ors [2011] EWCA Civ 1158 (18 October 2011)

The FSA, as a public authority with statutory immunity under paragraph 19 of Schedule 1 to FSMA, should not be required to give a cross-undertaking in damages in favour of third parties when seeking freezing orders in law enforcement proceedings. The statutory immunity and the nature of law enforcement actions justify dispensing with such undertakings, and no distinction should be made between defendants and third parties in this context.

Citation
[2011] EWCA Civ 1158
Parties
Appellant/claimant: The Financial Services Authority; Defendant: Sinaloa Gold PLC; Defendant: PH Capital Invest (a person or persons trading as); Defendant: Glen Lawrence Hoover; Respondent/intervenor: Barclays Bank PLC
Jurisdiction
England and Wales
Judgment Date
18 October 2011
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal allowed
Legal Topics
Freezing Injunctions, Cross Undertakings in Damages, Public Authority Immunity, Third Party Rights, Law Enforcement Injunctions
Financial Regulation Civil Procedure Freezing Injunctions Cross Undertakings in Damages Public Authority Immunity Third Party Rights Law Enforcement Injunctions

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Parties

The Financial Services Authority

Appellant/claimant

Sinaloa Gold PLC

Defendant

PH Capital Invest (a person or persons trading as)

Defendant

Glen Lawrence Hoover

Defendant

Barclays Bank PLC

Respondent/intervenor

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether the Financial Services Authority (FSA) should be required to give a cross-undertaking in damages in favour of third parties (such as banks) when obtaining a freezing order in law enforcement proceedings under the Financial Services and Markets Act 2000 (FSMA).
  2. 2 Whether the statutory immunity from damages in paragraph 19 of Schedule 1 to FSMA precludes or affects the court's discretion to require such undertakings.

Ratio Decidendi

The FSA, as a public authority with statutory immunity under paragraph 19 of Schedule 1 to FSMA, should not be required to give a cross-undertaking in damages in favour of third parties when seeking freezing orders in law enforcement proceedings. The statutory immunity and the nature of law enforcement actions justify dispensing with such undertakings, and no distinction should be made between defendants and third parties in this context.

Court Disposition

Appeal allowed

Orders

  • Set aside the undertaking in paragraph (3) of Schedule B to the judge's order.
  • Substitute the undertaking in respect of costs as set out in paragraph 10 of Mr Phelan's first affidavit.