Cancer Research UK Ltd v Morris & Anor

On an interim application involving a proprietary claim, the court may continue a freezing injunction on a proprietary basis where the claimant has a good arguable case that identified assets are trust property. Those assets should not be used for living expenses or legal costs while the defendant has other available assets. Access may arise only if the proprietary assets are the defendant’s only available funds.

The court may order detailed disclosure to police an injunction and trace trust property. Permission to pass compelled information to the police for a possible criminal investigation is a separate discretionary question. It should not be granted where it is unnecessary to protect the claimant’s civil rights and risks undermining the respondents’ right to silence and fair-trial protections.

The claimant charity alleged that its former employee and his wife had fraudulently obtained approximately £260,000 over a four-year period. It brought civil claims including breach of fiduciary duty, deceit, restitution, unjust enrichment and a proprietary claim alleging that the respondents held relevant money and property as constructive trustees.

Following a without-notice freezing injunction, the claimant applied to continue and extend the order worldwide, impose limited proprietary restrictions, obtain further information and disclosure, and use that information in disciplinary or criminal proceedings. The central issues were whether the injunction and disclosure orders were justified, and whether compelled information should be supplied to the police.

1. Freezing injunction and proprietary basis. The injunction was continued and extended worldwide. The claimant had a good arguable case against both respondents and there was a clear risk of dissipation. Money paid by mistake to a recipient who knows of the mistake may be held on constructive trust, so that the recipient’s conscience is affected and the recipient becomes a trustee.
2. Use of proprietary assets. Where assets may belong to the claimant, the court will not permit them to be used for ordinary living expenses or legal costs while the defendant has other assets available for those purposes. The defendant must use those other assets first. The limited order sought did not impose an absolute restraint and was granted.
3. Disclosure. Bank statements and further information about invoices, payments, recipients and the disposition of money were ordered. The disclosure served the legitimate purposes of policing the injunction, identifying the claimant’s assets and tracing trust property. The court accepted that equity has jurisdiction to safeguard trust assets and investigate what has happened to missing trust funds.
4. Use of information in disciplinary proceedings. Permission was granted for use in disciplinary or related legal proceedings arising from the first respondent’s suspension or dismissal.
5. Use of information in criminal proceedings. Permission to supply the information to the police was refused at that stage. It was not necessary to protect the claimant’s civil rights. The police and Crown Prosecution Service had their own investigative and restraint-order powers, and disclosure could prejudice the respondents’ right to silence and Article 6 fair-trial protections. The refusal was not final: a later application, or a police third-party application, might be considered in different circumstances.
6. The respondents’ argument that the availability of criminal restraint proceedings barred the claimant’s civil relief was rejected. Criminal restraint proceedings serve public interests under CPS control, whereas the claimant’s civil proceedings sought protection of its own private proprietary interests.

First-instance decision. No prior appellate history is stated in the judgment.