Holyoake v Candy [2017] EWCA Civ 92

The defendants to an unlawful means conspiracy claim appealed against the imposition of a notification injunction on the basis that the Judge at first instance had applied an incorrect test in relation to the level of risk of dissipation of assets required to be shown.

Held:

  • The correct test with respect to risk of dissipation was the same as the Courts apply when considering freezing injunctions. The Judge at first instance had therefore been wrong to accept that a lesser degree of risk would suffice when determining whether to grant a notification injunction.
  • A court should not accept that a notification injunction was necessarily less onerous than a conventional freezing injunction.

JSC BTA Bank v Ablyazov [2017] EWCA Civ 40

After obtaining judgments against the defendant, the claimant brought a claim against the defendant and his son-in-law on the basis that they had, in breaching the freezing order obtained in the previous proceedings, conspired to injure the bank by unlawful means, aimed at preventing it from making any substantial recovery. The Judge at first instance upheld the bank’s claim.

Held:

The Court of Appeal held that the Judge at first instance had been correct to find that civil contempt of court by breaching court orders, such as a freezing injunction, could qualify as unlawful means for the purposes of the tort of conspiracy to injure by unlawful means.

Phoenix Group Foundation v Cochrane [2017] EWHC 418 (Comm)

A firm of solicitors received funds into their client account which were the proceeds of a property which was caught in a freezing injunction against their client. The solicitors threatened to transfer those funds into their office account to satisfy their outstanding fees so the claimant sought an order extending the freezing injunction over the monies.

Held:

  • As the funds had already been transferred to the solicitors, the money was already theirs regardless of which internal account it was held in. The Court could therefore not make an order restraining the defendant from committing a threatened breach and, in the absence of fulfilment of the Chabra criteria[1] or a proprietary injunction, would not make an order against a third party merely because the transfer had occurred through a breach of a freezing injunction.
  • There was good arguable case that the funds paid over would be amenable to execution of a judgment against the defendant if the claimant’s claim succeeded because she was entitled to it when it was transferred to the solicitors or because it would be in her power to seek the return of the monies. That was sufficient to satisfy the Chabra jurisdiction.

Taylor v Van Dutch Marine Holding Ltd [2017] EWHC636 (Ch)

A secured creditor applied to vary a freezing injunction to allow it to enforce its security against assets caught by the injunction. One of the defendants had previously given a debenture to secure a large sum, with a fixed charge over its property, including intellectual property, in the creditor’s favour. The creditor wanted to have a receiver appointed to dispose of the charged property.

The claimant who had obtained the freezing injunction in its favour had refused to allow the appointment of a receiver, arguing that some or all of the other defendants might ultimately own the charged property.

Held:

  • The freezing injunction did not affect the right third party with security over property caught in a freezing injunction and so the secured creditor did not need the Court’s permission to exercise that security.
  • The Court distinguished the Jersey case of Gangway Ltd v Caledonian Park Investments (Jersey) Ltd [2001] 2 Lloyd’s Rep. 715 on the basis that it was not intended to deal with a normal security enforcement situation where the disposers acts were not viewed as a disposal by the defendant.
  • The dispute as to ownership of the charged property was irrelevant as a freezing injunction’s purpose was not to protect defendants from having the creditor wrongly enforce its security.

Touton Far East Pte Ltd v Shri Lal Mahal [2017] EWHC 621 (Comm)

An application to commit for contempt of Court the defendant company’s directors (including a former director), chairman and second largest shareholder, and company secretary, for failing to comply with ancillary orders to the claimant’s freezing injunction against the defendant company. A writ of sequestration over the company’s assets was also sought.

Held:

  • There had been breaches of the freezing injunction by reason of the failure to disclose the disposal of assets. All the defendants had been aware of the court order and had been served with the notice of committal proceedings, yet there was evidence to show that the company had made shipments with a value of over $20,000 on at least three occasions and it had failed to disclose those disposals in a “wholly inadequate” witness statement produced by the company secretary.
  • The fact that the company did not have assets in the court’s jurisdiction did not mean that a writ of sequestration “would be futile”. The Court could not stand by and allow the deliberate breaches of its orders to go unmarked.
  • The Court sentenced the Defendants to prison sentences ranging from 6 to 18 months according to the chain of command within the company.

Newmafruit Farms Ltd v Magnolia Park Ltd [2016] EWHC 2205 (QB)

The applicants applied for the continuation of a freezing injunction against the respondent companies until after judgment at trial, or further order. The respondents were among the defendants of a fraud claim brought by the applicants, who submitted that they were an intrinsic part of that claim. The freezing injunction had been imposed against the respondents in December 2016, after which their bank had prevented them from accessing their account online which had impacted their business.

Held: application granted

  • There was a good arguable case on a substantive claim over which the court had jurisdiction. It was clear that there were a number of transactions amongst the defendants in the fraud claim requiring explanation. If the applicants established fraud, the transactions involving the respondents would form part of it.
  • The court was satisfied that the respondents had assets within the jurisdiction.
  • Finally, there was a real risk of dissipation of those assets. There was good evidence to support the allegations of less than honest conduct on behalf of the first defendant to the claim, who was a disqualified director but nonetheless the alleged de facto director of the respondents. He moved money through companies he controlled as it suited him, and the first respondent had already been re-mortgaged to an unknown extent – if substantial a direct dissipation of an asset. The respondents had also failed to provide all of the accounting information ordered in previous judgments which illustrated a casual attitude to orders made against them. The court was satisfied that the injunction should continue until after judgment at trial or further order.