Complete Retreats Liquidating Trust v Logue & Ors

A freezing order obtained without notice may be discharged where the applicant has failed seriously to make full and fair disclosure. The court exercises a single discretion, considering culpability, the significance of the non-disclosure, proportionality, the merits, and all relevant circumstances. The general rule is discharge and refusal to renew, although continuation or re-grant remains possible in an appropriate case. Separately, the applicant must show a real risk that a judgment will be unsatisfied because of unjustifiable dealings with assets. Ordinary commercial dealings and the mere use of an offshore trust do not establish that risk. The requirement of a good arguable case applies in support of foreign proceedings, but the court need not assess the merits where material non-disclosure and absence of dissipation risk independently dispose of the application.

The applicant sought to discharge a worldwide freezing order exceeding $9.6 million made without notice against Geoffrey Logue and Hayden Holdings Foundation. The order supported bankruptcy proceedings in the United States under Civil Jurisdiction and Judgment Act 1982. Emma Logue was no longer subject to the substantive injunction.

The respondents alleged material failures of full and fair disclosure, absence of a real risk of dissipation, and absence of a good arguable case. The central issues were whether the without-notice evidence had presented a materially incomplete and prejudicial picture, whether dissipation risk existed, and whether the order should be continued or renewed.

1. Disposition. The freezing injunction was discharged and no fresh injunction was granted.
2. Full and fair disclosure. An applicant for a without-notice freezing order must make the fullest fair disclosure of material facts, including likely defences and matters that proper inquiries would have revealed. The duty is judged by the court, not by the applicant’s assessment of materiality. The applicant failed to disclose important evidence concerning service, the alleged blackmail, the contractual and financing background to the London properties, and substantial defences under the US proceedings. These failures were serious and, in part, deliberate.
3. Effect of non-disclosure. Applying the principles summarised in Arena Corp Ltd v Schroeder [2003] EWHC 1089 (Ch), the court has a single discretion. It must consider culpability, significance, proportionality, the merits, and the public interest in full disclosure. The general rule is discharge and refusal to renew. This was an appropriate case to apply that rule.
4. Risk of dissipation. The applicant also failed independently to establish a real risk that a judgment would be unsatisfied by unjustifiable conduct. The alleged misconduct was weakly supported. Holding property through an offshore foundation, selling investment property, and engaging in property development did not, without more, establish dissipation risk. There was also no evidence that the respondent had moved the assets despite allegedly knowing of the US proceedings.
5. Good arguable case. The court accepted that the test described in Canada Trust Co. v Stolzenberg (No. 2) [1998] 1 WLR 547 could apply to a freezing order supporting foreign proceedings. However, it declined to determine which side had the better argument under US bankruptcy law because the application was already disposed of on the independent grounds of non-disclosure and lack of dissipation risk.