ND v KP

In ancillary relief proceedings, a freezing order requires objective facts showing a likely disposition, transfer, movement or dissipation of assets with the intention of defeating the applicant’s claim. The court cannot freeze assets merely because preservation until trial would be desirable. The statutory and inherent jurisdictions apply materially the same test. An application without notice is exceptional and requires positive evidence that notice would cause irretrievable prejudice. An applicant who proceeds without notice must provide full and fair disclosure. Material non-disclosure ordinarily requires discharge, although the court retains a single discretion to continue or re-grant the order, exercised sparingly and proportionately.

The petitioner wife obtained an urgent without-notice freezing order over bank accounts and properties in Switzerland. A mirror order was subsequently obtained in Geneva. The respondent husband applied to discharge the English order, obtain the discharge of the Swiss order, seek an inquiry into damages, and obtain consequential directions and costs.

The wife relied on historic asset transactions, unexplained transfers, concerns about funds allegedly held for a business associate, and incomplete confirmation concerning a trust account. The central issues were whether those matters established the threshold for freezing relief, whether the application should have been made without notice, and whether the wife had complied with her duty of candour.

1. Threshold for relief. A freezing order in ancillary relief proceedings may be sought under section 37 of the Matrimonial Causes Act 1973 or under the inherent jurisdiction. Although the statutory and inherent formulations use different language, they require materially the same evidence: objective facts showing a likelihood of a future transaction or movement or dissipation of assets, with the intention of defeating the claim for financial relief. The jurisdiction is not a general power to preserve assets until trial.
2. Without-notice applications. An injunction without notice is an exceptional remedy. It should be sought only where there is positive evidence that giving notice would cause irretrievable prejudice. The ordinary rule is that both sides should be heard before an interim order is made.
3. Candour. A party seeking without-notice relief owes a high duty of full and fair disclosure. The principles summarised in Arena Corporation v Schroeder [2003] EWHC 1089 (Ch) apply equally in ancillary relief proceedings. Breach ordinarily requires discharge of the order, although the court retains a single discretion to continue or re-grant it. That discretion must be exercised sparingly, with regard to culpability, materiality, the administration of justice, proportionality and all the circumstances.
4. Application. The matters relied upon were historic, insufficiently particularised, explained in the husband’s evidence, or unrelated to a prospective transaction. They fell well short of the required threshold. There was therefore no justification for the without-notice application. The wife had also failed in her duty of candour, and the breach was sufficiently grave to require discharge of the English injunction ab initio.
5. The Swiss mirror order should be discharged because its obtaining and continued existence were oppressive and vexatious. Any issue concerning damages arising from the injunction was directed to be heard at the ancillary relief trial.

First-instance decision. The judgment does not state any subsequent appellate history.