The test for dishonesty in a freezing order application

http://www.bailii.org/ew/cases/EWHC/Ch/2015/2897.html

This case concerned an application to discharge a freezing order. In order to obtain a freezing order, an applicant must show "a good arguable case" on the merits. The parties differed on whether this test was the same as, or higher than, the test for summary judgment/strike out. Warren J approved textbook commentary to the effect that the test is not rigid and well-defined, but instead must be left to the judgment of the court. The judge also cited earlier authority that "a stronger case must be shown than would justify relief of a less stringent kind". Because, once the threshold of an arguable case has been reached, the court must still look at all other relevant factors, the judge was required to examine the evidence in detail.

In this case, the risk of dissipation depended largely on inferences to be drawn from allegedly dishonest conduct. The judge held that: "the test of good arguable case for the purposes of the applicable tests for the grant of a freezing order does not require there to be good arguable case of dishonesty. However, where alleged dishonesty is relied on as part of the case in support of a risk of dissipation, it is important to consider whether a good arguable case of dishonesty is established in relation to the conduct relied on. If a good arguable case of dishonesty is not established, that conduct is not relevant to the argument that there is risk of dissipation".

On the facts of the case, the applicant was unable to show a good arguable case of dishonesty in all but two instances, which involved relatively small amounts of money. Since no clear fraud had been established in relation to those amounts, a real risk of dissipation could not be proven.