Revenue & Customs v Sunico A/S & Ors

Where a claim against a defendant has been dismissed in its entirety, a freezing order founded on that claim should be discharged. The court may, however, continue a freezing order based on a surviving alternative claim where there remains a properly evidenced risk of dissipation, reducing the secured amount to reflect the surviving claim. A defendant seeking discharge must provide clear evidence of the assets in question, the persons controlling them and the absence of any real risk of dissipation. Costs are discretionary: indemnity costs require exceptional circumstances, and where claims substantially overlap, costs may appropriately be reserved or dealt with globally after trial.

Following summary judgment in favour of the eighth defendant, Dayal, and the ninth defendant, Nari, on conspiracy claims, both defendants sought consequential orders. They applied for discharge of freezing orders made against them. They also sought costs, principally on the indemnity basis.

Nari’s entire claim had been dismissed. Dayal remained subject to an alternative claim under section 423 of the Insolvency Act 1986, although the pleaded fraud claim against him had been dismissed. The issues were whether the freezing orders should be discharged or reduced, whether there remained a sufficient risk of dissipation, and what costs orders should be made.

1. Nari’s freezing order. Since the entirety of the claim against Nari had been dismissed, he was clearly entitled to discharge of the domestic freezing order. The court declined to direct discharge of the Singapore Mareva injunction, since that was a matter for the Singapore court.
2. Dayal’s freezing order. The dismissal of the fraud claim did not require immediate discharge because the section 423 claim survived and HMRC maintained that there remained a risk of dissipation. The evidence did not clearly establish the nature of Dayal’s assets, who controlled them, or that those persons would not dissipate them. Dayal remained free to make a specific discharge application supported by evidence addressing those matters, including any arrangements concerning assets ostensibly owned by him.
3. The freezing order against Dayal was continued for the time being, but reduced to US$14,764,612. The section 423 claim, as pleaded, was not restricted to payments made during the Relevant Transaction Chains.
4. Costs. Indemnity costs were refused. Although the circumstances were unusual, the claim had been brought in good faith and there had been arguments against summary judgment. Nari was awarded costs on the standard basis for the main action, the domestic freezing-order application and the summary judgment or strike-out application.
5. Dayal’s costs attributable to the conspiracy claim were reserved to the trial judge because the factual work substantially overlapped with the surviving section 423 claim. HMRC was ordered to pay three-quarters of Dayal’s costs of his summary judgment application and opposition to amendment, on the standard basis. Costs relating to the continuing freezing order were reserved.