Case Alert - [2018] EWHC 243 (Ch)

Court defines scope of a consent order which discharged a freezing order

The claimants obtained a proprietary injunction and worldwide freezing order against the defendants. The parties then came to an agreement about using rental proceeds from the frozen properties to meet ongoing essential costs. A few months later, the injunction and freezing order were discharged pursuant to the terms of a consent order made by the Court.

A dispute subsequently arose as to the scope of the consent order and whether an undertaking given by the defendants (and referred to in the consent order) included rental income. That undertaking was not to dispose of or diminish the value of the properties and rental income was not expressly included within the definition of the properties (which was expressed to include the "defendants' right, title, and interest in the assets"). Nevertheless, the judge held that rental income fell within the definition. Very wide words had been used to define the secured properties and the defendants' ability to receive rental income "has been derived from the defendants' "right, title and interest" in those assets…. Indeed, the definition of "Security" and "Secured Properties" is so wide that, if the parties had intended this definition to exclude the rental income, then this exclusion would have needed to be expressly stated using clear wording". In the same way, the judge noted that interest accruing to a cash deposit at a bank would be caught by an undertaking relating to that deposit.