Thursfield v Thursfield

Applications to discharge a worldwide freezing order and an order permitting service out of the jurisdiction should be assessed by reference to material non-disclosure, the enforceability of the foreign judgment and the practical utility of relief. An English court should not refuse enforcement merely because the foreign court applied a different legal approach or reached a result unfamiliar in English law. Where a judgment’s constituent elements and reasoning are identifiable, possible appellate or natural justice challenges do not necessarily prevent enforcement, particularly where the elements are severable. The court may require targeted disclosure of assets and funding sources where there is a real possibility that assets have been concealed or are held through nominees.

The claimant sought to enforce in England a substantial judgment made by the Michigan courts arising from her former husband’s alleged non-disclosure of assets and income under a settlement agreement. A worldwide freezing order was made without notice in May 2011. Permission to serve out of the jurisdiction and substituted service through the defendant’s solicitors followed in August 2011.

The defendant applied to discharge or set aside those orders, alleging material non-disclosure, misrepresentation, lack of natural justice in the Michigan proceedings, and absence of sufficient benefit in suing in England. The claimant also sought further information about the defendant’s assets and the sources of litigation funding.

1. The freezing order and service-out order. Both orders had been properly made and were continued. The enforcement of a foreign judgment was an appropriate jurisdictional gateway. A sufficient advantage in suing in England arose from the defendant’s UK pension, his historical and continuing connections with the jurisdiction, and the international character of his assets and lifestyle.
2. The court rejected the contention that the Michigan judgment was unenforceable merely because the defendant considered the reasoning erroneous or because the Michigan court used a principle derived from matrimonial law, including Sands v Sands. It was not appropriate to denounce a foreign court as lacking natural justice simply because its legal system produced a different result. The Michigan judgments made the assessment of the award and its constituent elements sufficiently clear. Any remaining appellate or natural justice issues were capable of being addressed by severing the affected elements.
3. The alleged non-disclosures and inaccuracies were not material. The duty of full and frank disclosure did not require the claimant to invent speculative defences. The omissions concerning the pension and the receiver did not justify discharge because the pension remained available for enforcement and no material prejudice or mischief had occurred.
4. The freezing order was not being used oppressively. Although its effect should not be overstated, the claimant’s concerns about dissipation and concealment were justified on the evidence. The court also declined to discharge the order because of complaints concerning the passport provision, communications with banks, or the cap on legal expenses. The latter issue was addressed in Revenue & Customs Commissioners v Begum [2010] EWHC 2186 (Ch), but the cap had not in practice prejudiced the defendant.
5. Following JSC BTA Bank v Ablyazov [2011] EWHC 2664 and JCS BTA Bank v Solodchenko [2011] EWHC 2163, the court had a wide jurisdiction to make orders necessary to render the freezing order effective. Targeted questions concerning assets previously held, disappeared assets, nominees and the sources of funding were therefore ordered. The risk of third-party privacy intrusion was proportionate to the need to ensure the order’s effectiveness.

First-instance applications in the High Court concerning the continuation of a worldwide freezing order, permission to serve out of the jurisdiction, substituted service, and ancillary disclosure.