Metropolitan Special Project Ltd v Marigold Service Ltd

Where a party seeks permission to appeal against refusal to continue a freezing injunction, a delay of four weeks or more is ordinarily fatal unless exceptional circumstances are demonstrated. The delay is especially significant because the injunction is intended to prevent dissipation of assets, and delay may show that no continuing urgency existed when the lower court decided the matter. A later change in circumstances may be relevant to a fresh application to the trial judge or another Queen’s Bench Division judge, but does not necessarily justify permission to appeal. The continuation of a freezing order is discretionary. Where the evidence disclosed no proper basis for interfering with the lower judge’s discretion, permission was refused.

Metropolitan Special Project Ltd sought permission to appeal out of time against an order of Mr Justice Mackay dated 10 May 2001. The order refused to continue a freezing injunction obtained against Marigold Service Ltd and awarded costs to Marigold. Permission had first been refused on paper by Lord Justice Clarke, who accepted that a good arguable case was arguable but declined to extend time.

Before the Court of Appeal, Metropolitan relied on a renewed risk that Marigold’s remaining property might be sold and its assets dissipated. The central issues were whether the four-week delay in seeking permission could be excused and whether there was a sufficient basis for challenging the judge’s discretionary refusal to continue the injunction.

Application refused. Lord Justice Aldous delivered the judgment, with Lord Justice Rix agreeing.

1. Delay. The evidence explained the filing delay, and such a delay might be excusable in ordinary circumstances. The context was decisive, however. The order sought to be continued was a freezing injunction obtained in extreme haste to prevent dissipation of assets. A delay of four weeks or more, without exceptional circumstances, required an exceptional justification to avoid being fatal. The admitted absence of urgency during the period of delay was a clear indication against granting permission.
2. Changed circumstances. The fact that one property had been sold, another was being marketed, Marigold and its owners were outside the jurisdiction, and Marigold no longer had solicitors on the record might support an application to the trial judge or another judge of the Queen’s Bench Division to prevent dissipation. Those matters did not determine whether permission should be granted to appeal Mr Justice Mackay’s order.
3. Discretionary decision. At the original injunction hearing Marigold’s evidence had not been available. By the later hearing, the judge had before him evidence of Marigold’s assets, including property equity and a bank balance, and had considered all the evidence. Although dealing with a foreign-registered company could create practical enforcement difficulty, nothing in the evidence required the judge to continue the injunction. His conclusion was an exercise of discretion, and the Court of Appeal would not have altered it.

Permission to appeal out of time was therefore refused.

• High Court: On 10 May 2001, Mr Justice Mackay refused to continue the freezing injunction and ordered Metropolitan to pay Marigold’s costs. He also refused permission to appeal.
• Court of Appeal (Civil Division): Lord Justice Clarke refused permission on paper and declined to extend time. On renewal, Lord Justice Aldous, with Lord Justice Rix agreeing, refused the application.