Chorus Group v Berner (BVI) Ltd & Anor

For a freezing injunction, the claimant must show both a good arguable case and a real risk that a judgment will remain unsatisfied because of asset dissipation. The risk may be inferred from the respondent’s corporate structure, limited and opaque assets, funding difficulties, and evasive conduct concerning payment. Unsupported allegations are insufficient, but specific evidence of intended dissipation is not always necessary where the overall conduct creates the required inference.

An applicant seeking relief without notice must provide full and fair disclosure and explain why notice was not given. An omission does not automatically require discharge. The court retains discretion to continue or regrant an injunction where the order is otherwise justified.

Chorus Group, a building contractor, applied to continue and enlarge a freezing injunction granted without notice against Berner (BVI) Ltd and JJW Ltd. Chorus also sought summary judgment on an unpaid cheque arising from a settlement agreement following an adjudication concerning construction payments.

The respondents applied to discharge the injunction, alleging material non-disclosure and contending that there was no evidence of a real risk of dissipation. The central issues were whether the without-notice application involved material non-disclosure and whether the evidence established the requirements for freezing relief.

1. Disposition. The injunction was continued, but the frozen amount was fixed at £1.4 million rather than the £2 million sought. The respondents could not realistically resist summary judgment on the cheque.
2. Non-disclosure. The principles in Brink’s Mat v Elcombe [1988] 1 WLR 1350 applied. The applicant had to make full and fair disclosure of material facts and conduct proper inquiries. In this case there was no material non-disclosure concerning the respondents’ funding, party contacts, the claim documents, valuation 9, or the settlement agreement.
3. The Practice Direction to Part 25, para 3.4, required evidence explaining why notice was not given. That explanation was absent. Nevertheless, this omission alone did not justify discharging an injunction which was otherwise warranted, particularly because the respondents were aware that without-notice relief was being contemplated.
4. Risk of dissipation. Applying The Niedersachsen [1983] 2 Lloyd’s Rep. 600, the question was whether refusal of relief would involve a real risk that a judgment in Chorus’s favour would remain unsatisfied. The two respondents were companies outside the jurisdiction, their ownership and assets were comparatively opaque, the first respondent was a single-purpose vehicle with one principal asset, and there were unexplained funding difficulties.
5. The respondents’ conduct was decisive in the overall assessment. Certified sums had not been paid, purported administrative difficulties had been given as an explanation, and a cheque was produced which the evidence indicated would not be honoured. That pattern of evasiveness justified an inference that payment of a judgment was intended to be avoided. Further specific evidence of dissipation was therefore unnecessary.