In Lexi Holdings plc v Luqman and others – Butterworths Law Direct 17.8.07 the claimant company (the company), by its joint administrators, commenced proceedings against the first Defendant and his family, including the fifth Defendant. The company successfully applied without notice for freezing orders against the fifth Defendant. The fifth Defendant purported to comply with the freezing orders by stating, in written evidence, that he had no or negligible assets. The Claimant, however, considered that that written evidence was plainly incredible, given that, inter alia, in documentation for the opening of a bank account, the fifth Defendant was stated to have assets worth £15 m. The Claimant therefore applied for an unless order debarring the fifth Defendant from defending the proceedings unless he had, within 14 days, complied with the asset, disclosure and tracing orders previously made. The judge held that the fifth Defendant's written evidence could not be rejected as plainly incredible, and ordered that the company could later apply to cross-examine the fifth Defendant on the issue.
The Court of Appeal allowed the appeal, holding that the issue of non-disclosure of assets had had to be determined at the time of the application for the unless order. If the evidence had not been incredible but had been contested, the proper course was not to postpone the issue of cross-examination, but to order it. The judge had therefore been wrong to postpone the issue of cross-examination to a future application, and on that basis his decision would be set aside. It therefore fell to the Court of Appeal to decide the matter. In the circumstances, the fifth Defendant's written evidence was incredible and it was necessary to make an unless order with regard to the disclosure of assets.