London and Quadrant Housing Trust v Prestige Properties Ltd

An injunction must state clearly what the respondent must do or refrain from doing. In context, a vested interest is an existing proprietary right, while a contingent interest depends on a future event. A freezing order may extend to property in which any one defendant has an interest, rather than only property jointly held. It should not extend to property based merely on a defendant’s belief that an interest exists. Although a maximum financial limit is usual, it is not invariably required where exceptional dishonesty, obscure financial affairs and non-disclosure justify a wider restraint confined to property interests.

London and Quadrant Housing Trust v Prestige Properties Ltd concerned an appeal against paragraph 3 of an order made by His Honour Judge Cryan in the Clerkenwell and Shoreditch County Court on 13 January 2012.

Following judgment for the claimant in forfeiture proceedings and an order requiring the defendants to pay costs, the judge made a freezing injunction over leasehold and freehold property. The defendants challenged the injunction on the grounds that its wording was uncertain and that it was excessive because it contained no financial limit. The central issues were the proper construction of the injunction and whether the absence of a monetary ceiling invalidated it.

Appeal allowed in part. The Court of Appeal corrected the wording of the freezing injunction, but upheld its substance.

1. An injunction must identify clearly what the respondent must do or refrain from doing, as reflected in paragraph 5.3 of the Practice Direction supplementing CPR Part 25.
2. The phrase vested or contingent interest was sufficiently intelligible in context. A vested interest is an existing proprietary right. A contingent interest is one which will vest only if a future event occurs.
3. Because the defendants were jointly liable for the costs, the injunction could properly apply to property in which any one or more of them had an interest. It was not confined to property in which all three defendants had interests.
4. The words referring to property which Eugene or Barry Burke believed, or ought to have believed, was subject to such an interest were deleted. The injunction could properly operate only where one of the defendants did in fact have an interest, irrespective of that defendant’s state of mind.
5. A freezing order will normally contain a maximum sum to avoid unnecessary interference with a defendant’s freedom to deal with assets. However, the judge had not erred in omitting a financial limit. The case was highly unusual, involving findings of brazen dishonesty, deliberately obscure financial affairs, failure to disclose assets and uncertainty about the value of the defendants’ property. The injunction was also confined to freehold and leasehold property and did not restrict dealings with other assets.
6. The objections should ordinarily have been raised before the trial judge or by a short application to vary the order. Nevertheless, for pragmatic reasons, the Court of Appeal made the necessary corrections itself.

• Court of Appeal (Civil Division): On appeal against paragraph 3 of the County Court order, the court allowed the appeal only to correct the scope and wording of the freezing injunction.
• Clerkenwell and Shoreditch County Court: His Honour Judge Cryan made findings of breach and refused relief against forfeiture, ordered the defendants to pay costs, and imposed the freezing injunction on 13 January 2012.