This claim was brought by Gerald Metals (“GM”) against Mr Timis in relation to a debt of over $77 million arising from an off-take contract. GM sought to rely on the guarantee that was provided by the Timis Trust (the “Trust”). However, there was concern by GM that Mr Timis had not been transparent about relevant assets held in the Trust (in fact, assets that were previously listed were not held by it at all). Dissatisfied with the responses provided by Mr Timis, who refused to give undertakings in this regard, GM applied under CPR 25.1(1)(g) for details of what was in the relevant trusts.
In granting the on notice application, the court considered the test set out in Lichter & Schwarz v Rubin  EWHC 450 (Ch), namely, whether:
- the jurisdictional threshold had been crossed (i.e. the requirement that there are assets which are, or may be, the subject of an application of a freezing order); and
- using the court’s discretion, it was just and appropriate to grant the relief in all the circumstances.
It was held that the jurisdictional threshold was not particularly high and in this case, there was good reason to believe that GM would apply for a freezing order pending disclosure of the assets. In particular, the court rejected the argument that because GM had put Mr Timis on notice of its intention to pursue a freezing order, it must have no genuine concern for the dissipation of the assets. This would suggest that the making of the application for disclosure must itself mean a freezing order was inappropriate. This could not be the correct interpretation of CPR 25.1(1)(g).
As to discretion, the court held that this was “an appropriate case” to grant relief given the on-going lack of clarity about assets held in trust, in respect of which GM had sought answers for some time prior to making its application. Furthermore, GM would be prejudiced if it could not find out more about the assets as this was imperative for GM to understand whether the trust was worth pursuing.
This case acts as a useful reminder of CPR 25.1(1)(g) and how it can be used as a tool for identifying assets ahead of making an application for a freezing order. It also highlights that the jurisdictional threshold test is lower than that for freezing assets. When the court is considering this power, there only needs to be credible evidence and a reasonable possibility of an application for a freezing order.
That said, this case also serves as a cautionary reminder of the significant risk that such an application will alert the respondent to the possibility of such an order. Put simply, the purpose of any injunction may well be defeated if assets are dissipated before the freezing order can be obtained.