Pynes Three Ltd v Transco Ltd

The court may grant a freezing injunction before proceedings where it is just and convenient and the interests of justice require protection against asset dissipation. The jurisdiction extends to assets within the jurisdiction and may support anticipated litigation, arbitration or adjudication. An application may be made without notice where urgency or the interests of justice justify that course. The remedy should be sought at the earliest reasonable opportunity. In adjudication disputes, the court may provide appropriate support because adjudication is intended to produce rapid interim decisions followed by immediate payment.

Pynes Three Ltd, a refurbishment contractor, sought a without-notice freezing order against Transco Ltd. The claimant anticipated serving an adjudication notice concerning substantial claims arising from refurbishment works and feared that the defendant, an SPV with limited remaining assets, would dissipate or charge those assets before any adjudicator’s decision could be enforced.

The defendant was not represented. The application concerned whether the court should grant interim injunctive relief before adjudication proceedings and before an on-notice hearing.

1. Jurisdiction and governing principles. The court had jurisdiction under section 37 of the Supreme Court Act and CPR 25.1(1)(f) to grant an interim remedy restraining dealings with assets, including where the assets and the anticipated process for obtaining relief were within the jurisdiction.
2. The jurisdiction could be exercised where it was just and convenient and in the interests of justice. It was not confined to preserving assets threatened by insolvency or financial difficulty. The interests of justice could independently justify a freezing order before proceedings.
3. The jurisdiction could support anticipated adjudication as well as litigation or arbitration. Adjudication was a statutory and contractually agreed process intended to resolve disputes rapidly and to secure immediate payment of sums decided by the adjudicator. The courts should support it by appropriate enforcement and ancillary relief.
4. The application should be made at the earliest reasonable opportunity. Without-notice relief was available where urgency or the interests of justice required it, but it was an exceptional course requiring a particularly high standard of reasonableness and appropriate candour in disclosure.
5. On the evidence, the claimant had a good arguable case and a reasonable prospect of success. There was evidence of substantial unpaid claims, conduct suggesting that the defendant’s remaining assets might be dissipated or charged, and a real risk that the claimant would otherwise have no reasonable prospect of recovery. The balance of convenience, proportionality and fairness favoured protection of at least part of the claims.
6. The claimant’s cross-undertaking in damages, supported by its holding company and to be secured by written guarantee, was sufficient for the immediate order. The freezing order was granted without notice, subject to an early return for an on-notice hearing and consequential directions.