Thane Investments Ltd & Ors v Tomlinson & Ors

A freezing injunction requires a good arguable case, solid evidence of a real risk that the respondent will dissipate assets so that a judgment will go unsatisfied, and a conclusion that the order is just and convenient.

In a without-notice application, strict compliance with procedural safeguards is essential. A finding of dishonesty in other dealings, or residence outside England and Wales, does not by itself establish a real risk of dissipation. The applicant must provide clear evidence directed to that risk and explain why notice was withheld. Failure to do so may require the injunction to be discharged.

The claimants obtained without-notice freezing orders against Mr Tomlinson and Reyall Business Consultants Ltd after judgment in related proceedings concerning another director. The applications relied principally on that judgment and a witness statement asserting a suspicion that assets might be dissipated.

Mr Tomlinson and Reyall applied to discharge the orders. Neuberger J in the Chancery Division dismissed their application and ordered further disclosure. They appealed. The central issue was whether the evidence and procedure justified maintaining freezing orders against absent respondents.

1. Appeal allowed. The court discharged the part of Neuberger J’s order which had dismissed the appellants’ discharge application, and discharged the original freezing orders.
2. A freezing injunction is an exceptionally intrusive remedy. The applicant must establish a good arguable case, a real risk that assets will be dissipated so that a judgment will go unsatisfied, and that the order is just and convenient. Solid evidence of likely dissipation is required.
3. The without-notice applications did not meet those requirements. The material did not provide evidence that either appellant had assets likely to be dissipated. It did not show a poor credit history, previous defaults, threatened asset removal, or comparable conduct. The earlier judgment showed that the trial judge had taken a poor view of Mr Tomlinson’s evidence, but it had addressed different issues and did not support the necessary inference of dissipation.
4. Strict procedural safeguards under the Civil Procedure Rules and the Part 25 Practice Direction protect an absent respondent. There was no application notice, no affidavit evidence, no adequate statement of the material facts relied upon, and no explanation why notice had not been given. A statement of the claimants’ suspicion was not evidence.
5. Neither alleged dishonesty nor Isle of Man residence was, without more, a sufficient basis for inferring a real risk of dissipation. Neuberger J therefore gave insufficient weight to the absence of notice, the procedural breaches, and the lack of evidence on the decisive risk.

The claimants could make a fresh High Court application only if supported by appropriate evidence and made in compliance with the applicable procedural requirements. Costs were awarded to the appellants, to be assessed if not agreed.

• Court of Appeal (Civil Division): Allowed the appeal and discharged the freezing orders.
• Chancery Division (Neuberger J): On 6 December 2002, dismissed Mr Tomlinson’s and Reyall’s application to discharge the freezing orders and ordered further disclosure.
• High Court (His Honour Judge Anthony Thompson QC): On 23 May 2002, made without-notice freezing orders against Mr Tomlinson and Reyall.